German interest rates: cut possible

Article Abstract:

The German central bank, the Bundesbank. decided against reducing interest rates prior to summer 1996, but repo rates could still be reduced, argues Salomon Brothers. Inflation appears subdued and the Ifo survey indicates that this is likely to continue. The German economy is undergoing a recovery and this means that there is less pressure to reduce interest rates, while a drop in the value of the German mark in relation to the US dollar would allow less scope for rate reductions.

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Rate threat in Europe

Article Abstract:

German interest rates are likely to be raised because of the drop in value of the German mark. A low value for the German mark could be accepted with a weak economy, but the economy is strengthening. The German central bank or Bundesbank is reviewing its repurchases rate, and news of this led to a rise in the mark's value. German rates may not be raised until 1998, when economic growth is stronger. A rise in German rates could affect European stock prices.

Interest Rates, Central banks, Deutsche Bundesbank

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