Latest News Israel

Bank of Israel leaves interest rate unchanged

Share |
Monday, August 30th, 2010

As reported in Port2Port: The Bank of Israel has left the interest rate unchanged after announcing a 0.25% hike at the end of last month
 
Bank of Israel Governor Prof. Stanley Fischer announced last Monday that interest rate for September would stay at 1.75%. The Bank of Israel has left the interest rate unchanged after announcing a 0.25% hike at the end of last month.
 
Bank of Israel officials who objected to raising the interest rate to 2% believe that such an increase would harm the economy, curb the rise in the growth rate and lead to a drop in dollar and euro exchange rates and hurt Israeli exports.
 
The decision to leave the interest rate unchanged was described by the Bank of Israel as, “consistent with the gradual process of returning the interest rate to a more ‘normal’ level, intended to position inflation firmly within the target range, and to support the further recovery of economic activity, while maintaining financial stability”.
 
In a press release the Bank of Israel noted that two additional factors influenced its interest  rate decision were:
 
–           The slowdown in economic activity overseas (and the concern that it would harm Israeli exports) and
–           The fact that the world’s major central banks were in no rush to raise their interest rates.