At the time, with the short-term policy 3  With the introduction of negative interest rate policies, the zero lower bound no longer has a literal meaning; however, given for example the presence of banknotes, which for the central bank represent liabilities with no interest, there is a certain limit to the extent to which nominal policy interest rates can be lowered.
2  interest rate at 0.5 percent, there was little room for further reductions. The situation was quite different from that in Europe and the United States, where there was room for a further reduction by 3 to 4 percentage points. With inflation expectations low and little room for a further reduction in nominal interest rates, the Bank's ability to respond was limited.