This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/6951476.stm

The article has changed 5 times. There is an RSS feed of changes available.

Version 0 Version 1
Fed cuts rate to stabilise market Fed cuts rate to stabillse market
(10 minutes later)
The US Federal Reserve has cut its primary discount rate, which is the rate at which it lends money to banks, from 6.25% to 5.75%.The US Federal Reserve has cut its primary discount rate, which is the rate at which it lends money to banks, from 6.25% to 5.75%.
The surprise cut is meant to help deal with credit problems which have been destabilising stock markets. The surprise cut is meant to help deal with banks' current credit problems.
"These changes are designed to provide depositories with greater assurance about the cost and availability funding," a Fed statement said."These changes are designed to provide depositories with greater assurance about the cost and availability funding," a Fed statement said.
It is a different rate to the federal funds rate, which is 5.25%. It is a different rate to the federal funds rate, which is the key rate changed at the Fed's regular meetings.
The move to boost the amount of money available in the financial system and make it easier for banks to borrow money from each other.
That should ease the credit crunch which has been driven by the fear that there are unknown debt problems due to exposure to sub-prime lending.
The news has had a dramatic effect on stock markets worldwide, with the London FTSE rising by nearly 200 points or more than 3%.
It is highly unusual for the US central bank to change interest rates in-between its regular, 6-weekly meetings.