Bank of Israel Keeps Existing Policy Stance

May 25, 2015

In a statement affirming the appropriateness of Israel’s 3-month old 0.10% central bank interest rate, officials noted the current sub-zero rate of CPI inflation, 2.1 percentage points below the inflation target range of 1-3%, continuing moderate growth in real GDP, and shekel appreciation since the prior month’s meeting amounting to 3% against the dollar, 1.3% versus the euro and 1.7% on a trade-weighted basis.  Housing prices are rising.  With the present stance of monetary policy, officials believe that in-target inflation can be restored in twelve months.  In addition to February’s rate cut of 15 basis points, the Bank of Israel’s policy interest rate was reduced three times each in 2011, 2012, 2013, and 2014.  All twelve of those cuts were by 25 basis points.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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