He said the economy needed a half‐point cut in the leading interest rates as new orders and productivity over‐all were still unfavorable, even if the domestic recession had already bottomed out in some regions of Germany.Ĭlear signs of a general improvement should be seen by the autumn with the motor, machinery and building sectors already showing the first signs of an improvement now, Mr. The Bundesbank president, Karl Klasen, told a news conference following the meeting the Central Council discussed making a larger cut in both rates but rejected this in favor of keeping to its policy of la gradual easing of credit restrictions. Monetary conditions for the economy will thus be eased without putting into jeopardy further success in its fight against inflation, it added. In a statement after the Bundesbank's Central Council meeting, it said today's decisions extended the moderate easing in its monetary policy. The bank last cut both rates by one‐half of a percentage point on Dec. The discount rate is the rate at which banks can borrow money against bills as security.

The lombard rate is the rate at which banks can borrow against securities. It also lowered the lombard rate to 71/2 per cent from 8 per cent, effective tomorrow.

6 (Reuters)-The West German central bank said today it was cutting its discount rate to 51/2 per cent from 6 per cent.

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