Bank of Japan keeps interest rates steady, cuts inflation and growth forecasts for 2021

By Tuba Sahin

ANKARA (AA) - The Bank of Japan (BoJ) on Thursday held its benchmark interest rate unchanged at minus 0.1% while reducing its economic growth and inflation forecasts for this fiscal year ending in March.

"The Bank will apply a negative interest rate of minus 0.1% to the Policy-Rate Balances in current accounts held by financial institutions at the Bank," it said in a statement.

The BoJ said it will maintain monetary easing with an aim of achieving the price stability target of 2%.

"It will continue expanding the monetary base until the year-on-year rate of increase in the observed consumer price index exceeds 2% and stays above the target in a stable manner," the bank added.

Meanwhile, the GDP growth projection for the fiscal year 2021 was decreased to 3.4%, down from its previous forecast of 3.8% due to the impact of COVID-19 on consumption activities, supply-side constraints, and developments in overseas economies.

The bank also cut its forecast for consumer prices index to 0% from 0.6% for the fiscal year.