Israeli Central Bank Interest Rate Lifted by 50 Basis Points
March 28, 2011
The Bank of Israel implemented a third consecutive interest rate hike. It was the ninth tightening since normalization began in August 2009 and the first one to exceed 25 basis point in size. A statement published on the Bank of Israel’s web site called monetary policy still expansionary. CPI inflation now slightly exceeds 4.0% versus a 1-3% target, and expected inflation has also crept upward to around 4%. House prices are 16.3% higher than a year earlier, and other central banks in advanced economies are starting to raise their rates. The Shekel rose following today’s bigger-than-projected rate hike to a near 2-1/2 year peak against the dollar. This more forceful counter-weight against inflation points to further rate increases in the near term.
Copyright Larry Greenberg 2011. All rights reserved. No secondary distribution without express permission.
Tags: Bank of Israel
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