No Interest Rate Change for Bank of Israel this Month

August 26, 2013

As in June and July, the Monetary Policy Committee’s meeting in August concluded without a change in the 1.25% key central bank interest rate.  A statement released by the committee noted that expected CPI inflation over the coming year lies marginally below the middle the the 1-3% target range even though consumer prices rose 2.2% in the year to July.  The statement mentions uncertainty surrounding the path of Fed tapering, moderating economic activity at many emerging economies, and a 9.3% on-year rise in Israeli domestic home prices.  There were two 25-basis point cuts in Israel’s benchmark interest rate during May, four such reductions during 2012, and two others during the final trimester of 2011.  From August 2009 through May 2011, the interest rate underwent a normalizing process that lifted such from 0.5% to 3.25%.

Copyright 2013, Larry Greenberg.  All rights reviewed.  No secondary distribution without express permission.



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