Bonn Ups Bank Rate To 5%
BONN. Jan. 11ÛÓWest Germany's central bank, the Bundesbank, today renewed its fight to arrest this countryÛªs mounting inflation by raising Its discount rate from 4.5 to 5 cent.</br></br>The action was announced in Frankfurt by the bankÛªs vice president, Otmar Em-minger, following the first meeting of directors in the new year. It marked the fourth time in three months that the bank has boosted the rate by half a percentage point.</br></br>At the same time, the bank raised the so-called Lombard rate, which is applied on loans against capital, from 6.5 to 7 per cent. Both new rates will go into effect Friday.</br></br>As an additional measure, the bank announced a 10 per cent reduction in its rediscount ciuota to go into effect on April 1. The rediscount quota is the amount of money that banks can borrow from the Bundesbank at t lie discount rate instead of the Lombard rate, with its higher interest charges.</br></br>This lowering of the rediscount quota will be in addition to another 10 per cent reduction, announced last month and scheduled to go into effect on Feb. 1.