IMF's Gopinath urges BOJ to go slow in raising interest rates
© Reuters. FILE PHOTO: Sergio P. Ermotti, Group CEO of UBS, Gita Gopinath, First Deputy Managing Director of International Monetary Fund and Slawomir Krupa, CEO of Societe Generale attend the 54th annual meeting of the World Economic Forum in Davos, Switzerlan
Ending its negative interest rate policy in place since 2016, a move markets expect could happen by April, will also likely be smooth as there is a clear recognition by investors that inflation-adjusted real borrowing costs will remain very low, Gopinath said. "As long as the BOJ moves gradually, which is what they have signaled that they will do, and provides the right communication to go along with it, that should not have very large spillovers to the rest of the world," she said.
Gopinath said it was also important to keep Japan's financial system stable when exiting easy policies, including by ensuring that minimum liquidity requirements are available not just for big banks but their smaller counterparts.