8 Sept 2021
Interest Rates Remain Zero; BOJ Mainstream Policy Criticized
The Index Today
Former Bank of Japan Governor Masaaki Shirakawa stated banks may opt for zero interest rates as economies continue to struggle worldwide. Various economic policies and strategies implemented are being questioned with regards to their effectiveness.
The BOJ governor completed his term as head till 2013 and was frequently questioned for his lack of effort to manage economic stagnation in the country.
Haruhiko Kuroda succeeded Masaaki as the BOJ Governor and developed a stimulus program to help boost economic growth. However, the program was a failure and did not improve deflation to meet the 2% target.
Masaaki also mentioned that the country’s declining working-age population is also one key issue which must be prioritized to manage economic growth. It is widely believed that the Bank of Japan’s lack of focus combined with deflation were the main causes behind the Japan’s “lost decade.”
Masaki said, “Now, policy rates in advanced countries are all zero. I didn’t expect it would happen at the beginning of 2000, when BOJ was doing so-called zero interest rate policy, or quantitative easing.” The former governor recently held a seminar to introduce his new book, “Tumultuous Times” to shed light on his former years as the bank’s head.