Ex-BOJ’s Shirai: A “near-consensus” among global central banks that negative rates have huge drawbacks

In a Reuters interview held on Thursday, former Bank of Japan (BOJ) policymaker Sayuri Shirai argued against the use of negative rates for global central banks to fight the economic impact of the coronavirus pandemic.

Key quotes

“It has become a “near-consensus” among global central banks that negative rates have huge drawbacks.”

“It doesn’t make sense to deepen negative interest rates and hurt banks, when you’re actually trying to encourage them to lend more.”

“It’s a tool that is very hard to use at a time like now. It runs counter to the BOJ’s efforts to prod banks into boosting lending,”

BOJ Governor Haruhiko Kuroda also said on Thursday he sees no need to deepen negative rates at the moment but did not rule out that option for the future.