Chase raises prime rate to 18%

Press, 1 May 1981, Page 8

Chase raises prime rate to 18%

PA ~ y New York Chase Manhatten Bank, the third-largest United States bank, raised its prime rate from 17.5 to. 18 per cent yesterday — taking the lead for the second time this month in pushing up the interest charge. Chase .raised the rate charged . to . its most creditworthy customers from 17 per cent to 17.5 per cent ;On April 10 and was followed witliin a few days by the rest of the country’s major banks. At the time, analysts said the higher rate was merely a technical response to money supply conditions, and not a

harbinger of sharply higher interest rates. A number of leading bankers were predicting a continuing decline in the prime at least until this summer. But in recent weeks, interest rates have been rising, in response to fears that the United States Federal Reserve Board would act to tighten credit, and concern over a surge in the money supply. The “prime” reached an all-time high of 21.5 per cent last December, but then began a gradual decline that bottomed out at a 1981 low of 17 per cent on April 1.