June 18, 2014 / 8:03 AM / in 5 years

BOJ to provide almost 5 trillion yen to banks to boost lending

TOKYO, June 18 (Reuters) - The Bank of Japan said on Wednesday that it will dole out 4.9 trillion yen ($48.02 billion) this week to banks under a scheme it uses to encourage lending by providing financial institutions with cheap funds.

That is more than the 3.5 trillion yen the BOJ last provided in March in a sign that more banks are turning using the scheme, which could help the economy pull further away from 15 years of mild deflation.

Under the scheme, the BOJ lends funds to banks with 0.1 percent interest for four years to encourage banks to increase their overall lending to their customers.

The BOJ extended the duration of this scheme by a year and doubled its size to 30 trillion yen in February.

The central bank has provided 13.3 trillion yen in funds since the scheme started in June last year. ($1 = 102.0500 Japanese Yen) (Reporting by Stanley White; Editing by Kim Coghill)

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