US Federal Reserve cuts discount rate

March 17, 2008 at 9:51 pm | Posted in economy USA, finance | Leave a comment
Tags: ,

http://www.ndtvprofit.com/2008/03/17100333/US-Federal-Reserve-cuts-discou.html

The US central bank has cut its lending rate to banks by a quarter of a percentage point, in a dramatic bid to help financial institutions get cash and bolster an economy hit hard by defaults on home mortgages and a tightening credit market.The Federal Reserve approved the move unanimously in an emergency weekend meeting Sunday, immediately decreasing the so-called discount rate from 3.5 per cent to 3.25 per cent.
It also announced the creation of a lending facility to make short-term loans to financial institutions.
The new lending organization will make loans beginning on Monday and will last for at least six months.
The Fed said the decisions were “designed to bolster market liquidity and promote orderly market functioning. Liquid, well-functioning markets are essential for the promotion of economic growth.”
“These steps will provide financial institutions with greater assurance of access to funds,” Federal Reserve chairman Ben Bernanke said after the announcement, Bloomberg financial news reported.
The board’s action came ahead of its next regularly scheduled meeting, on Tuesday, at which analysts expect a cut in its benchmark interest rate of up to 1 percentage point.
It also approved the sale of ailing investment bank Bear Stearns to bank JPMorgan Chase.

Advertisements

Leave a Comment »

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.
Entries and comments feeds.

%d bloggers like this: