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Last updated at: (Beijing Time) Wednesday, December 11, 2002

US Fed Leaves Short-term Interest Rate Unchanged

The US Federal Reserve (Fed) decided on Tuesday to leave a key short-term interest rate unchanged at 1.25 percent, the lowest point in 41 years.


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The US Federal Reserve (Fed) decided on Tuesday to leave a key short-term interest rate unchanged at 1.25 percent, the lowest point in 41 years.

The vote was 12-0.

The Fed's policy-making body, the Federal Open Market Committee (FOMC) said in its statement that currently low rates are "providing important ongoing support to economic activity."

The Fed's only rate cut this year and the 12th since January 2001 came at the Fed's previous meeting on November 6. In response,some US commercial banks lowered their prime lending rate by a similar half-point to 4.25 percent, the lowest rate since May 1959.

The Fed's decision comes amid a stagnant US job market, a bumpy stock market and uncertainties on a possible war against Iraq.

Knocked down by last year's recession, the US economy has experienced an uneven recovery this year. The economy increased atan annual rate of 5 percent in the first three months of this yearand slowed down sharply to 1.3 percent pace in the second quarter. Although it gained at a rate of 4 percent in the third quarter, many analysts are expecting that rate of increase will be much lower in the last quarter of this year.


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