Israeli Policy Interest Rate Unchanged at 0.25%

May 20, 2019

Six months have now elapsed since the one and only interest rate hike of the current tightening cycle. The rate previously had been pinned at 0.10% from February 2015 to November 2018, and it remains far beneath the last cyclical high in 2010 of 3.25% in the summer of 2011. In a published statement today following a scheduled policy review, the Monetary Committee wrote that shekel appreciation of 6% in trade-weighted terms thus far this year is delaying the convergence of CPI inflation on the middle of its 1-3% target range. GDP grew faster in major industrial economies last quarter than anticipated, but the threat of a growth-depressing trade war escalation persists. Israeli growth has been comparatively high, and the labor market is tight. Monetary officials project a gradual further rise in the central bank interest rate, but it will be engineered with caution.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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