Bank of Israel: No Interest Rate Change this Month

December 23, 2013

The Israeli central bank interest rate was kept at 1.0%, its level since a 25 basis point cut in October.  Eight previous 25-basis point cuts were implemented stretching back to September 2011, including two in May 2013.  A statement released today by the central bank observes that November inflation was less than forecast and that expected inflation lies a bit below the target midpoint.  Policymakers are confident that inflation will hold within target parameters on the current monetary policy stance. An uptick in the shekel since the November meeting and highly uncompetitive monetary policies in other economies also allow officials in Israel to keep their interest rate as low as 1.0%.  At such a level, it is only 50 basis points above the Great Recession low.  Subsequently, the rate peaked at 3.25% from May 2011 until September 2011.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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