The US Federal Reserve raised its emergency lending rate late on Thursday for the first time since the financial crisis.
The Fed raised the discount rate it charges banks by 25 basis points to 0.75% from 0.5% as a response to improved market conditions that allowed it to scale back emergency aid for financial institutions.
The Fed also raised the minimum bid on a special programme to boost short-term lending to 0.5%, from 0.25%.
It did not change its funds rate - which remains at a target of between zero and 0.25%.
Afterwards the US dollar rose against a basket of currencies. The BBC reports it hit a nine-month high against the euro of $1.3477.
Against the yen, the dollar rose to its highest level in a month at 92.10 yen, while the pound was trading at $1.5415.
The Fed cited "continued improvement in financial market conditions" as the reason for its move.
The move also took stock markets by surprise, with Asian markets seeing large falls on Friday.
The Nikkei 225 in Japan index fell 2% to 10,123.58, while the Hang Seng in Hong Kong fell 2.6% to 19,894. European markets were largely unchanged.
Oil prices fell by more than $US1 to below $US78 per barrel.