GERMAN BANK RATE CUT
Reduction From 5 To 4 Per Cent. FRANKFURT, Nov 1 . 10 The West German bank rate will be out from 5 per cent, to 4 per cent., effective tomorrow, the central council of the German Federal Bank decided today. The decision to lower the bank rate to 4 per cent, was by no means unexpected. It had been preceded by two consecutive reductions in the interest rates for short-term securities last week. Since the Federal bank increased the rate of discount by 1 per cent, last June, foreign currencies had come in by leaps and bounds.
The rate of 5 per cent, was considered by experts to be far too high, especially after Britain lowered her bank rate to 5J per cent, a fortnight ago. The Swiss, French and United States rates are still below the West German level.
Financial experts in Frankfurt believe the decision will not mean a fundamental change in the Federal bank’s policy on the home economy, which is booming more than ever before. They believe the bank will now use different policies for the two important sections: the bank rate weapon to regulate, if possible, the inflow or outflow of foreign currency; and financial restrictions to put a brake on the runaway situation at home.
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Press, Volume XCIX, Issue 29361, 14 November 1960, Page 20
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214GERMAN BANK RATE CUT Press, Volume XCIX, Issue 29361, 14 November 1960, Page 20
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