Bank of Israel

February 27, 2018

Although Israel’s central bank interest rate has been only 0.10% since a 15-basis point reduction in February 2015 and a combined three percentage points of rate cuts over the prior four years, CPI inflation is currently below target and very low. According to a released statement, however, “in the past month inflation expectations increased, the shekel fell about 3% over the past month, and “to the extent that the depreciation will persist, it is expected, together with the impact of wage increases, to support the continued increase in inflation.” Bottom line, “the Monetary Committee intends to maintain the accommodative policy as long as necessary in order to entrench the inflation environment within the target range.”

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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