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Big New York bank cuts prime rate another notch

A leading bank cut its prime rate another half point Thursday, to 17 percent, the lowest level in seven months. Chemical Bank of New York, the sixth-largest US bank, was the first major one to set its rate at 17 percent. Other big banks were holding to 17.5 percent for the prime, the lowest rate charged on loans to banks' best corporate customers.

The move reflected the recent decline in short-term interest rates, analysts said. It was the first cut in the prime since the Federal Reserve Board reduced its discount rate by one point Friday, to 13 percent.

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The prime, which reached a near-record level of 20.5 percent in July, has been declining gradually since early September.