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Bank of France cuts overnight lending rate

The Bank of France cut its overnight lending rate from 8.25 to 7.75 per cent yesterday, the fifth cut since the de facto collapse of the ERM. It also suspended its overnight lending facility in mid-afternoon, saying there was enough liquidity in the market.

As a result, the franc closed at Fr3.4875 to the mark, down from Friday's close of Fr3.4815. The Danish central bank also cut its emergency interest rate by half a point to 10.5 per cent, weakening the krone.