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World Bank Rates to Rise for Some Debtor Nations

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Associated Press

The World Bank is raising interest rates for more prosperous Third World countries to 7.65% annually, the first such increase since the bank began lending at variable rates in 1982, officials said Wednesday.

The rate will apply during the first six months of this year on $37 billion worth of loans to about 70 countries, said Sheldon Rappaport, a spokesman for the bank.

For the second half of 1988, the rate was 7.59%. The increase amounts to only 0.06% but will cost the borrowers an additional $11 million, Rappaport estimated. The rate is based on the cost of the bank’s own borrowings and will be recalculated in mid-1989. The bank gets most of its funds from borrowing on world markets.

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The bank is owned by 151 governments, with the United States holding the largest block of shares, and is the biggest source of aid to Third World countries.

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