By setting up a scheme in advance which takes into account the impact of interest rate cuts on the functioning of financial intermediation, the Bank aims to enhance the effectiveness of the additional easing measure of short- and long-term interest rate cuts.
Specifically, through this scheme, the Bank applies certain interest rates as an incentive to financial institutions' current account balances, corresponding to the amount outstanding of funds that the Bank has been providing through its various fund-provisioning measures to promote financial  9  institutions' lending, and the incentives will be raised when the short-term policy interest rate is lowered.