This commitment has facilitated market participants’ projection of future interest rates, and market interest rates have been stable. Firms have been able to enjoy a stable market environment in which they can raise funds at low interest rates. The current easy monetary policy is expected to have a stronger positive impact on economic activity in the private sector as the economy recovers further.
Given that the Bank’s policy commitment allows firms to continue enjoying low funding costs and that the economic recovery raises the expected rate of return on new investment, firms’ profitability on investment will increase. Firms will become more proactive in seeking investment opportunities. Banks will also benefit from increased opportunities for profit from lending and other financial services.