BOJ to Hold Unscheduled Meeting Today on Money Market

By Mayumi Otsuma

Oct. 14 (Bloomberg) -- The Bank of Japan said it will hold an unscheduled monetary policy meeting today to discuss ways to make it easier to add funds to money markets.

Governor Masaaki Shirakawa and his colleagues will meet at 8:30 p.m. in Tokyo, the central bank said in a statement posted to its Web site today. Shirakawa will brief the press at 10 p.m.

Central banks in Europe yesterday said they will offer commercial banks as many dollars as they want at fixed interest rates, in agreements with the Federal Reserve to reduce borrowing costs in money markets. The Bank of Japan said yesterday it was considering introducing ``similar measures'' after starting a dollar-swap agreement with the Fed last month.


The policy board will discuss ``monetary control matters, including ways to further enhance the effectiveness of money- market operations, except for those pertaining to the bank's reserve system,'' today's statement said.

The European Central Bank, the Bank of England and the Swiss National Bank will offer European banks unlimited dollar funds with maturities of seven, 28 and 84 days at fixed interest rates against ``appropriate collateral,'' the Fed said yesterday. Previously, the Fed had capped at $380 billion the currency it would swap with the three central banks.

The Bank of Japan said on Sept. 18 it will start offering lenders up to $60 billion to ease tensions in the local money market, where foreign financial institutions were being asked to pay more for overnight loans than their Japanese counterparts. The central bank doubled the amount of dollars it offered to $120 billion on Sept. 30.

To contact the reporter on this story: Mayumi Otsuma in Tokyo at motsuma@bloomberg.net