Interest rate policy

Japanese: 金利政策 - きんりせいさく

It is a monetary policy tool in which the central bank changes the lending interest rate (official discount rate) offered to commercial banks up or down, thereby influencing the movement of commercial bank lending rates and other market interest rates in general, and thereby adjusting bank lending and the amount of currency. Interest rate policy is also called official discount rate manipulation or official discount rate policy, as the central bank's interest rate policy is centered on changing the official discount rate. Although a classical concept, it is the most traditional of monetary policy tools, and was also called discount policy because it was previously operated mainly through the discount rate on commercial bills.

[Sadao Ishida and Takuo Maeda, March 18, 2016]

How the official discount rate works

Central banks change the official discount rate while monitoring economic and price trends. When prices tend to fall during a recession, the official discount rate is lowered. As a result, market interest rates fall and monetary easing progresses, leading to economic recovery and price stability. Conversely, when the economy overheats and prices and the balance of payments show signs of decline, the official discount rate is raised and monetary policy is tightened. As a result, market interest rates rise and monetary policy becomes tighter, leading to adjustments to the economy, calming prices, and correcting the current account deficit. The former is a low-interest rate policy, and the latter is a high-interest rate policy.

For interest rate policy to be effective, at least the following two conditions must be met: (1) a mechanism must be in place whereby changes in the official discount rate bring about movements in overall market interest rates, and (2) the interest elasticity of corporate investment spending must be high.

[Sadao Ishida and Takuo Maeda, March 18, 2016]

Japan's interest rate policy

In Japan, almost all key interest rates were regulated to levels lower than the prevailing market rates by financial authorities or through discussions between the relevant parties during and after the Second World War (artificially low interest rate policy). In February 1959, the standard interest rate system was introduced to bank lending rates, which were linked to changes in the official discount rate at the time. In addition, the interbank call rate fluctuated to reflect the actual supply and demand of funds in the market, and acted as one of the channels for policy effects. During the high-growth period of the 1960s, with banks over-lending, the Bank of Japan tried to achieve policy effects through the announcement effect of changes in the official discount rate and the regulation of lending volumes through window guidance (credit allocation).

However, since the late 1970s, the weight of fiscal policy has increased, and large amounts of government bonds have been issued each year, leading to an accumulation of government bond balances. As a result, government bond yields have come to play an important role in overall interest rates. In addition to the continued large fiscal deficits, the current account balance has been consistently in surplus, leading to an increase in the accumulation of financial assets by households, and companies have had ample cash on hand, reducing their reliance on bank loans. Furthermore, the long-term and short-term financial market has developed, and the movement toward interest rate liberalization has accelerated. The forms of fund raising and management by companies and others have diversified, and interest rate preferences have become stronger. Meanwhile, the internationalization of finance has progressed, and the exchange rate has become sensitive to fluctuations due to the gap between Japanese interest rates and overseas interest rates. In order for the Bank of Japan to implement effective monetary policy in this current financial system, it has become important to always face the financial market, operate operations flexibly (open market operations), and guide short-term market interest rates, especially the unsecured overnight call rate, through policy. In this situation, deposit interest rates were completely liberalized from October 1994, and as a result, market interest rates in general were linked to short-term market interest rates (unsecured call rates, overnight rates, etc.). As the impact of the operation of the official discount rate on market interest rates itself decreased, the official discount rate became a symbolic indicator, and the call rate became the operating target (guiding target, sometimes called the policy interest rate) for the Bank of Japan's monetary policy management. Furthermore, in February 2001, the Bank decided to introduce a complementary lending system (the so-called Lombard-type lending system) and implemented it in March of the same year. This system is a system in which the Bank of Japan passively accepts borrowing applications from financial institutions and other organizations based on conditions set in advance, and executes the system within the range of the value of the collateral provided. The interest rates used at that time are the "basic discount rate and basic lending rate" (formerly the official discount rate, renamed in 2006). By using this system, financial institutions can raise the necessary funds at the relevant interest rates at any time, even if they are unable to raise funds in the market. As a result, this interest rate has come to function as an upper limit for short-term market interest rates. Therefore, even if the level of this interest rate is raised or lowered, it does not have a direct effect on overall market interest rates. In that sense, this interest rate is not used as an interest rate policy. However, it is considered to have an announcement effect in the sense that it shows the Bank of Japan's intentions to the market.

[Sadao Ishida and Takuo Maeda, March 18, 2016]

"The Creation and Development of the Official Discount Rate" by Kinji Tanaka et al. (1981, Seimei-kai) " "US Monetary Policy and Financial Markets" by Paul Meek, translated by the Bank of Japan's US Financial Market Research Group (1984, Jiji Press)

Source: Shogakukan Encyclopedia Nipponica About Encyclopedia Nipponica Information | Legend

Japanese:

中央銀行が市中銀行に対する貸出金利（公定歩合）を上下に変更することによって、市中銀行の貸出金利をはじめ市中金利全般の動きに影響を与え、それを通じて銀行貸出および通貨量を調整する金融政策手段。金利政策は、中央銀行が公定歩合の変更を軸として行うため、公定歩合操作あるいは公定歩合政策ともいう。古典的な考え方であるが、これは、金融政策手段のなかでもっとも伝統的な手段であり、以前は商業手形割引歩合を中心に運営されていたことから、割引政策ともいわれた。

［石田定夫・前田拓生　2016年3月18日］

公定歩合操作の仕組み

中央銀行は景気や物価の動向をみながら公定歩合の変更を行っている。不景気で物価が低下ぎみのときには、公定歩合は引き下げられる。それに伴って市中金利は低下し、金融緩和が進み、景気回復、物価安定が図られる。反対に景気上昇が過熱化し物価や国際収支に赤信号がついたときには、公定歩合は引き上げられ、金融は引き締められる。その結果、市中金利は上昇し、金融は逼迫(ひっぱく)して、景気の調整―物価の鎮静化―対外赤字の是正が図られる。前者は低金利政策、後者は高金利政策である。

　金利政策が有効性を確保するには、少なくとも次の2条件――すなわち、(1)公定歩合の変更が市中金利全体の動きをもたらすメカニズムが備わっていること、(2)企業の投資支出の利子弾力性が高いこと――が必要である。

［石田定夫・前田拓生　2016年3月18日］

日本の金利政策

日本では、第二次世界大戦中から戦後も引き続き、主要金利のほとんど全部が金融当局によって、あるいは関係者間の話し合いによって、実勢より低水準に規制されていた（人為的低金利政策）。1959年（昭和34）2月銀行貸出金利に標準金利方式が導入されて、これが当時の公定歩合の変更に連動することになった。また、銀行間のコールレートは市場の資金需給の実勢を映じて変動し、政策効果の一つの経路として作用した。1960年代の高度成長期には銀行のオーバーローンのもとで、日本銀行は公定歩合の変更による公示効果（アナウンスメント効果）と、窓口指導による貸出量の規制（信用割当）を通じて、政策効果の達成に努めた。

　ところが、1970年代後半以降、財政の比重が高まり、大量の国債が年々発行され国債残高が累増するに伴って、国債の利回りが金利全体のなかで重要な意味をもつに至った。また、こうした大型財政の赤字継続に加え、対外経常収支の黒字恒常化を背景に、家計の金融資産の蓄積が増加し、企業の手元資金も豊富になり銀行借入れ依存度が低下した。さらに長短金融市場が発達し金利自由化の動きも加速化した。企業等の資金調達・運用の形態は多様化し金利選好の動きが強まってきた。一方、金融の国際化（グローバリゼーション）が進み内外資金の交流が活発になり、日本の金利と海外金利との開きから、為替(かわせ)相場は敏感に変動することになった。こうした現在の金融システムにおいて日本銀行が金融政策の効果をあげるには、つねに金融市場に向き合い、オペレーションを弾力的に運営（公開市場操作）し、短期市場金利、とくに無担保コールレート（オーバーナイト物）を政策的に誘導することが重要となった。このようななか、1994年（平成6）10月以降、預金金利が完全に自由化されたことから、市中金利全般が短期市場金利（無担保コールレート・オーバーナイト物等）連動に移行し、公定歩合操作による市中金利そのものへの影響が低下したことから、公定歩合はシンボル的指標になり、コールレートが日本銀行の金融政策運営上の操作目標（誘導目標、ときには政策金利ともいわれる）となった。さらに、2001年（平成13）2月に補完貸付制度（いわゆるロンバート型貸出制度）の導入が決定され、同年3月から実施された。この制度は、日本銀行があらかじめ定めた条件に基づき、金融機関等からの借入れ申込みを受けて、差し入れられている担保価額の範囲内で受動的に実行する制度である。その際に用いられる金利が「基準割引率および基準貸付利率」（かつての公定歩合。2006年に名称変更）である。この制度を利用することで金融機関は、たとえ市場で資金を調達できない事態に陥っても、必要な資金を当該利率でいつでも調達することができるようになった。このことから、当該金利は短期の市場金利の上限として機能するようになった。したがって、当該利率の水準を上下したとしても市場金利全般に直接的に影響することはない。そういう意味では金利政策として当該利率を利用することはない。しかし、日本銀行の意思を市場に示すという意味ではアナウンスメント効果はあると考えられている。

［石田定夫・前田拓生　2016年3月18日］

『田中金司他著『公定歩合の生成と発展』（1981・清明会）』▽『ポール・ミーク著、日本銀行米国金融市場研究会訳『米国の金融政策と金融市場』（1984・時事通信社）』