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Call rate weighted average falls to zero.

TOKYO, June 9 Kyodo

The weighted average of unsecured overnight call loan rates dropped to zero for the first time in the Tokyo market Monday, money traders said.

The rate fall reflects the Bank of Japan's ultra loose monetary policy that has weakened financial institutions' need of tapping the market for loans, the traders said.

Loan rates dropped on the weighted average due to the continuation of deals between foreign banks at rates below zero, in which lenders pay interest to borrowers. On Monday, a deal was done at minus 0.03%.

The unusual transactions have become possible as foreign banks can raise yen through foreign exchange swaps at lower rates.
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Publication:Japan Weekly Monitor
Date:Jun 16, 2003
Words:111
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