World : W. Germany Hikes 2 Key Rates
Fearing higher inflation and seeing its currency pummeled by the dollar, West Germany raised two key interest rates today, a move quickly followed by three other West European nations.
The Bundesbank said its discount and Lombard rates would each rise Friday by half a percentage point, to 4% and 6% respectively. But the action did not help the West German mark gain on the dollar until waves of central bank dollar selling put the U.S. currency on the defensive. The central banks of France, Switzerland and Austria announced matching rises in their key official rates.
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