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Dutch money

rates slightly

higher

AMSTERDAM: Dutch money market rates rose slightly, but dealers said the increase was temporary as participants had postponed bidding ahead of a possible rate cut, which was carried through yesterday.

Germany was the first on Thursday to trim the discount rate to 3.50 percent from 4.00 percent, a move quickly followed by the Dutch, Belgian and Danish central banks.

A Dutch money market dealer said he expected no further trimming of official rates in Germany, but he did not rule out another cut in the Netherlands.

Many dealers were disappointed by the Dutch bank's cut yesterday as they had expected a bigger decrease.

The Dutch discount rate was trimmed to 3.50 percent on Thursday from 3.75 percent and the special advances rate was cut by 10 basis points to 3.90 percent.

"A decline of 50 basis points of the discount rate and a lowering 20 to 30 basis points for the special advances rate had been more in line with expectations," one dealer said.

He said the strength of the guilder and low inflation gave room for lower rates.

Dealers said the allocation of 1.46 billion guilders to the money market this morning under a four-day pact, at a rate of 3.90 percent, was sufficient.

Call money rates slipped six basis points to 3.87 percent. All other rates moved up a touch. Three-month deposits gained seven basis points to 3.92 percent and one-year paper rose to 4.07 percent bid from 4.05 percent.

The guilder was slightly off against the mark at 111.960 per 100 marks versus 111.945 on Thursday.-Reuter