GERMAN BANKS SEE LOW INTEREST RATES CONTINUING The Association of German Cooperative Banks said in a financial survey that domestic interest rates would continue to remain low for the time being. It said the Bundesbank could hold them down despite strong foreign influence and it saw no interest-straining factors in the economy that could affect the long-term capital market. The inflation rate of one pct also gave no occasion for higher nominal interest rates. But a probable rise in inflation late this year could give very slight grounds for a rise in nominal rates at year's end and next year, it said. The association said generally low interest rates, prospects of lower taxes, a stable dollar rate and expected strong domestic demand led it to believe that the investment climate would remain friendly and the economy would continue its slow but very sure growth. The Bundesbank had managed successfully to keep interest rates down on the short-term money market although its policies had exerted little effect on the long-term capital market, which was so important for investment financing and thus for the course of the economy, it said. In view of the limits to the possibilities monetary policy had in influencing the longer-term capital market, the association saw little sense in wanting to boost the economy through a short-term and expansionist monetary policy. On the other hand it also saw no reason for sticking dogmatically to the money supply target for the whole of 1987. The association said time would show to what extent speculative foreign money and short-term invested domestic money would distort money supply developments. The Bundesbank could hold down money market rates with the highly effective instrument of sale and repurchase transactions, it said.