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Fed cuts discount rate, announces new steps
March 16, 2008 / 11:35 PM / 10 years ago

Fed cuts discount rate, announces new steps

WASHINGTON (Reuters) - The U.S. Federal Reserve on Sunday lowered the discount rate it charges on direct loans to banks and announced a new facility through it which will lend to other big financial firms.

In a surprise statement, the central bank said it cut the discount rate to 3.25 percent, effective immediately. It also said it was setting up a new lending program under which so-called primary dealers could borrow directly from the Fed at that same rate.

Reporting by Mark Felsenthal

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