14 September 2001, 09:10 BoJ's Hayami says BoJ cannot deal with deflation by monetary policy alone
TOKYO (AFX-ASIA) - Bank of Japan governor Masaru Hayami said the
central bank cannot deal with deflation by monetary policy alone and
needs help from fiscal policy and structural reform.
"It is impossible to stop the current deflationary trend with
monetary policy alone," Hayami told budget committee members.
"Structural reforms and fiscal policy generate demand and are
indispensable to halting deflation."
He added that with short-term interest rates nearing zero, the
market is already flooded with liquidity.
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