P.M. BRIEFING : European Central Banks Increase Interest Rates to Battle Inflation
The West German Bundesbank led other European central banks in a surprise round of interest rate hikes today aimed at fighting inflation.
France and Switzerland quickly followed West Germany, in moves that knocked the recently strong dollar lower against the European currencies.
The Bundesbank said that its key rates would be raised Friday by half a percentage point, lifting the Lombard emergency funding rate to 7% and the discount rate to 5%.
The Bank of France raised its intervention and five- to 10-day securities repurchase rates, its two main interest indicators, half a point to 8.75% and 9.5%, respectively.
In Zurich, the Swiss national bank increased its discount rate by one point to 5.5%, effective Friday.
The Austrian and Dutch central banks also announced increases in their official interest rates. The Japanese central bank said it had no plans to raise rates.
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