In the new climate-related program revealed at the end of a BOJ two-day policy meeting, the central bank said it will provide financial institutions with one-year, zero-interest funds for their loans and investments in products such as green bonds to tackle climate change, that could threaten economic growth and financial stability.
An unlimited number of rollovers will be permitted under the program, which will be valid until March 2031, it said.
A growing number of central banks have become keenly aware of the need to deal with climate change but they differ on the degree of participation. The BOJ emphasizes its commitment to addressing climate issues in a calibrated move.
As a central bank, the BOJ also seeks to remain neutral by allowing private-sector financial institutions to make decisions on climate-related loans and investments.
Taking advantage of the global momentum for decarbonization, Japan has pledged to achieve carbon neutrality by 2050.
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