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Germany Leaves Rates Unchanged

November 6, 1997

FRANKFURT, Germany (AP) _ Germany’s central bank left key interest rates unchanged at its regular biweekly meeting Thursday.

The Bundesbank left the discount rate at 2.5 percent and the Lombard rate at 4.5 percent. Those rates have been at those historic lows since April 18, 1996.

It also left the securities repurchase rate at 3.3 percent for the next two weekly issues, after raising it from 3 percent on Oct. 9 as an anti-inflation measure.

Analysts had not been expecting a rate hike this week. The central bank is expected to raise rates in the coming months, however, to dampen inflationary pressure and bring yields in line across the European Union.

The Lombard rate is the rate at which banks can borrow emergency funds from the central banks and acts as an effective ceiling on overnight rates. The discount rate is the cheapest form of bank refinancing.

The repurchase rate is what the Bundesbank charges banks for buying back short-term securities when banks need cash for daily operations.

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