Bank of Israel

March 28, 2016

Israel’s policy interest rate, 0.10% since a 15-basis point cut in February 2015, was again left unchanged after the March monthly meeting of monetary policymakers.  In 2011, 2012, 2013 and 2014 the rate was cut three times each year.  All the reductions were by 25 basis points.  A statement explaining today’s decision noted that expected inflation rose fairly sharply since the February meeting.  However, on-year inflation remains negative at -0.2%, growth has moderating, the change in the environment reflects base effects, and the risks to both growth and inflation lie on the downside.  The statement suggests that the policy interest rate is likely to stay flat throughout 2016 and to rise about 40 basis points during 2017.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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