The Bank of Israel interest rate remains at 0.25%
Posted on Jan 9, 2020 by Ifi Reporter
The Bank of Israel interest rate remains at 0.25% - the Bank of Israel announced. This is in line with economists' estimates.
While in recent months market estimates have expected the interest rate to fall to 0.1% - as it was until November 2018 - in recent weeks it has been estimated that the interest rate will remain high, despite low inflation (0.3%, with the Bank of Israel's inflation target at between 1% and -3% - per cent, while at the same time the Bank of Israel increased its involvement in the markets through the purchase of more than $ 3.5 billion in foreign currency.
In the previous discussion of the interest rate decision, which took place at the end of November, four members of the monetary committee thought the interest rate should be left at its current level. Three of them believed that as the economy continues to grow at a near-potential rate, the labor market remains tight, inflation is likely to begin to hit the target starting another year, and it appears that the most prominent central banks in the world have reached their lowering of interest rates at this time - the interest rate may remain for the time being , And use additional policy tools (such as buying dollars). The fourth member of the committee believed that at the current real interest rate, monetary policy is very expansive, and given the conditions of growth and employment, no further expansion is needed.
On the other hand, one member of the committee voted to lower the interest rate to 0.1%, as his cumulative appreciation method could hurt economic activity and lead to a continued decline in inflation, which is already low.
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