Israeli Central Bank Rate To Remain at 0.5%
May 25, 2009
The Bank of Israel left monetary unchanged as expected, having earlier cut its key rate from 4.25% at the start of October to 0.5% late in the first quarter. Monetary officials also are continuing to buy government bonds and dollars to promote liquidity and contain any upward drift in long-term interest rates. A statement from officials projects negative 1.5% growth in 2009 after observing a drop in 1Q of 3.6% annualized led by declines of 48.5% saar in exports, 37.6% in investment and 4.3% in private consumption. CPI inflation is expected to hover near the middle of a 1-3% target range, buoyed by the impact of planned tax increases and depressed by global and domestic inflation.
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