Bank of Israel Policy Stays on Hold

April 23, 2012

Israel’s central bank benchmark hasn’t changed since a third cut of 25 basis points to 2.5% was implemented.  From a 3.25% peak, reductions were also done in September and November 2011.  A statement from the Bank of Israel cites a mix of considerations to account for the recent policy pause.  The European debt crisis has again heated up, and Chinese activity has slowed.  On the other hand, expected inflation of around 2.5% now exceeds the 2.0% rise of consumer prices between 1Q11 and 1Q12.  Price pressure can be observed in energy and rental housing.  The next policy announcement will be made on May 28.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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