No Change in Key Israeli Interest Rate
December 28, 2010
The Bank of Israel’s key interest rate was left at 2.0%, matching expectations. There so far have been six increases of 25 basis points each but none since September. In a released statement, monetary policy was called “expansionary” and in a gradual return to more normal levels, but several reasons were given for not raising the rate further at this time:
- Real estate price inflation, which had been excessive, has decelerated.
- The central bank rates in advanced economies are likely to remain low for a long time.
- The shekel appreciated since the November rate decision.
- Indications of expected inflation have fallen and are now below their target ceiling.
- Euroland’s debt crisis poses a downside risk to Israeli growth.
Copyright Larry Greenberg 2010. All rights reserved. No secondary distribution without express permission.
Tags: Israel
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