Bank of Israel

September 26, 2016

Israel’s central bank policy rate was left unchanged as expected at 0.1% at this month’s policy meeting. It’s been at 0.1% since a 15-basis point reduction in February 2015, and markets do not anticipate any rise over the coming year. Twelve earlier cuts of 25 basis ¬†points – three each per hear in 2011, 2012, 2013 and 2014 — were engineered by the Monetary Committee. A statement released today mentions negative current CPI inflation of -0.7%, subdued expected inflation, slow global demand, and a buoyant shekel since the prior meeting. New macroeconomic forecasts were unveiled showing an upwardly revised 2.8% growth estimate this year followed by 3.1% next year and inflation not rising back into its target corridor until 2017.

Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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