Prime rate up
NZPA-Reuter New York Major U.S. banks yesterday raised their prime rates from 19 per cent to 19.5 per cent, the second increase in a week and the fourth since the key lending rate hit a 1981 low of 17 per cent in early April. The prime rate, which hit a record 21.5 per cent last December, is the rate banks usuallly charge their best corporate customer for loans, and rates on other commercial and industrial loans are scaled accordingly. Last Monday the Federal
Reserve Board, which acts as the nation’s central bank, raised its discount rate from • 13 per cent to a record 14 per cent. By keeping a tight rein on bank reserves and credit in an attempt to slow growth of the money supply, the “F.E.D.” has been forcing up interest rates. Banks have been facing higher costs in getting funds since short-term interest rates in the money markets, an important source of money for big manks, started rising last month.
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Press, 13 May 1981, Page 23
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166Prime rate up Press, 13 May 1981, Page 23
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