Recently, the Bank’s accommodative stance on money market operations has enhanced the sense of an abundance of liquidity, causing market rates, including those on longer-term instruments, to decline further toward 0.1 percent, which is the rate applied to the complementary deposit facility.
Nevertheless, due to weak corporate demand for funds, the Bank’s ample supply of funds once more has failed to lead to an increase in bank lending, although financial institutions have not been averse to lending. In sum, the ordinary operation of the transmission mechanism of monetary easing has not been working.