Bank of Israel Retains 0.10% Interest Rate

April 6, 2017

In each of¬†four consecutive years, 2011-2014, Israel’s central bank interest rate was sliced three times by 25 basis points, and that cumulative three percentage points of rate reduction was punctuated by one final 15-basis point cut in February 2015 to 0.10%. The rate has stayed at that level ever since including after the April policy meeting that just concluded. A released statement¬†asserts that the “Monetary Committee intends to maintain the accommodative policy as long as necessary in order to entrench the inflation environment within the target range. The Bank of Israel continues to monitor developments in inflation, the real economy, financial markets, and the global economy, and will act to attain the monetary policy targets in accordance with such developments.” Recent appreciation in the Israeli shekel is depressing short-term expected inflation and making a rise of inflation back to target likely to take longer than imagined previously. Growth has been ample with near full employment.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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