CAPITAL DISTRICT BANKS FOLLOW SUIT ON INTEREST DROP.(Business)

Byline: Wire and staff reports

Capital District banks intend later this week to drop their prime lending rate to 8.5 percent to mirror Monday's one- half point cut by the nation's major banks, and economists said interest rates should keep falling in coming weeks.A drop in the prime rate usually precedes a decline in consumer lending rates for home mortgages, automobile and boat loans. The last time the prime rate hit 8.5 percent was in June 1978.Interest rates will continue to slide until the weakened economy shows some vigor, economists said Monday."Right now, interest rates are completely dependent on the state of the economy's performance," said Larry Chimerine, …