Bank of Israel

October 27, 2016

Israel’s central bank interest rate¬†was left at 0.10% after the October policy meeting. It’s been at that level since a 15-basis point reduction in February 2015. In each of the four previous calendar years, three 25-bp reductions had been administered. On-year CPI inflation still lies below zero and significantly under what constitutes price stability. This justifies a very accommodative stance even though Israel’s economy is expanding. The latest statement assumes a likely 25-basis point increase in the U.S. federal funds rate target before the end of this year and notes that although 2.2% weaker than at the time of the late September Israeli monetary policy meeting, the shekel still shows a 3.4% on-year advance against the dollar.

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

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