P209 CEEFAX 209 Thu 21 Oct 21:11/14 1/2 BUNDESBANK I CUTS RBTJS The Bundesbank has unexpectedly cut its key interest rates. Its discount rate is coming down to 5.75% from 6.25) and its Lombard rate to 6.75% from 7.25%. A spokesman said the bank's action - it included a cut in the "repo" rate to a fixed 6.4% - was in line with its policy of cautious easing. Its moves caught currency markets bz surprise. Most obsjrvjrs had not expected the German central bank to act until the beginning of November at the earliest. Headlines 201 Exchanges 247 r sP209 CJEFAX 209 Thu 21 Oct 21:16/12 2/2 n n |. "CU NCY S ENG H I PROMPTED RATE CUTS" Bundesbank president Hans Tietmjyjr said the strength of the mark and improved prospects for monetary stablilty made rate cuts possible. The external value of the mark is 3.6% higher than in July and if wage settlements remain moderate then policy may bj more flexible. Some analysts, however, bjlievj the size of the cut may have signalled a change in Bundesbank policy. Worries about the depth of the German recession may have been the reason for the cuts, analysts said. Headlines 201 Exchanges 247 Diary Forex Exchanges Options