Specifically, the Bank has established a new framework called the Asset Purchase Program through which it conducts the fixed-rate funds-supplying operation against pooled collateral and purchases various financial assets. The assets to be purchased range from long-term government bonds and treasury discount bills to risk assets such as CP, corporate bonds, exchange-traded funds (ETFs), and Japan real estate investment trusts (J-REITs).
The resulting trade deficit coupled with meager net capital and financial flows and the external debt servicing costs put tremendous pressure on the reserve position of the central bank. A ray of hope is our workers’ remittances, which were around USD14 billion in FY13 with a 9% increase in the first quarter of this financial year.