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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Earlie who wrote (247123)6/25/2003 1:17:48 PM
From: Pogeu Mahone  Read Replies (2) of 436258
 
bullish..lol

Japan's key overnight money rate falls below zero for the first time
TOKYO - Borrowing money in Japan took on a new dimension on Wednesday when the nation's overnight lending rate fell below zero for the first time in history, the Bank of Japan said.

The minus 0.001 per cent money rate - which means lenders pay interest to borrowers - came because Japanese authorities have eased monetary policy in an effort to support the ailing economy and steady stock and currency markets.

'The overnight money rate averaged at minus 0.001 per cent today, down from 0.002 per cent,' a central bank official said. 'It was the first time the overnight rate has fallen below zero in our history.'

The central bank uses the call rate, charged on overnight loans between commercial banks, as a benchmark to gauge fund demand and supply in the money market.

Investors said the minus rate was not a big surprise as some deals between banks at below-zero rates have been made since January.

Some dealers said the negative rate came after some foreign banks, which attempted to lower the level of their yen funds, lent some 20 billion yen by paying interest.

'We had thought this would happen anytime, since there have been below-zero rate deals since earlier this year,' said Yasuo Goto, an analyst at Mitsubishi Research Institute.

'But it is symbolic and surely abnormal, which was caused by the zero-rate policy (adopted by the Bank of Japan) and a loss of trust in the Japanese financial system among foreign banks,' Goto said. 'No one thinks the rate will continue falling rapidly, but the rate is likely to hover around zero for the time being.'

business-times.asia1.com.sg.
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