November 01, 2007	Thursday	Shawwal 19, 1428

WASHINGTON, Oct 31: The Federal Reserve announced on Wednesday it had cut its base federal funds interest rate by a quarter of a percentage point to 4.50 per cent to shore up a distressed housing sector and ailing credit markets.

The central bank’s move had been widely anticipated by the financial markets.

The rate cut marks the second reduction in the federal funds short-term rate in as many months. Fed officials are concerned the housing slump could destabilize the wider economy.

The rate reduction also offers fresh relief to gummed-up credit markets which have tightened since major banks disclosed hefty losses tied to mortgage-backed securities.—AFP