The Bank of Japan, or BoJ for short, has decided to raise interest rates for the first time in nearly 2 decades. Over the past 17 years, intertest rates sat at a rate which was below 0.1% in order to combat deflation within the nation's economy. Now, the nation's interest rate sits at "around zero to 0.1%". This is all in part with Japan's plan to battle deflation which has caused economic stagnation since the late 1990s. This adds to their list of unconventional methods used by the BoJ, similar to their quantitative easing method which was another method introduced by them.
3 comments:
What are some potential challenges or risks associated with transitioning away from negative interest rates after such a prolonged period?
I wonder if this change will end up having a substantial impact on their economy, regardless it is good that they are taking a new approach after such a long spell of economic trouble.
The Bank of Japan has raised interest rates for the first time in almost 20 years as part of their efforts to fight deflation and stimulate economic growth. This move marks a significant shift from their long-standing near-zero interest rate policy and adds to their unconventional measures to tackle economic challenges
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