The Bank of Canada has lowered its target for the overnight lending rate 50 basis points, while the Reserve Bank of Australia has raised its cash rate by 25 bps. The Canadian central bank said developments indicate that the U.S. housing and liquidity crisis is "in some respects, intensifying," while Australia's central bank reported that pressures in short-term money markets "have eased." The Reserve Bank of Australia also said inflationary pressures in the country's economy outweigh the downside risks even though "international capital and equity markets remain fragile" and there has been "some tightening of lending standards to risky borrowers" that may still "have further to go."

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