Bank of Israel: No Change in Interest Rate but Dovish Statement Released
January 25, 2016
Eleven months have passed since the last Israeli central bank interest rate cut, a reduction of 15 basis points to 0.10%. From a peak of 3.25%, the rate previously had been cut by 75 basis points each year from 2011 through 2014. At 0.1%, Israel is one of many central banks with either a negative interest rate or a virtual ZIRP stance (a rate of zero or so close to zero as to exert the same influence on the economy as a rate of zero percent). A released statement after the January meeting of the monetary committee observed downwardly trending short- and medium-term inflation expectations, greater obstacles to achieving the inflation target, continuing moderate GDP growth associated with high risks, steady expected long-term expected inflation anchored at the central bank’s target, a 2% decline of the shekel against the dollar since the December 27 policy meeting,and weak and volatile global financial market conditions. On average, consumer prices dropped 1.0% last year.
Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank of Israel
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