Bank of Israel raises key interest rate by 0.5%

The Monetary Committee of the Bank of Israel, led by Governor Prof. Amir Yaron, has raised the interest rate by 0.5% to 3.25%. This is the sixth rate hike by the Bank of Israel since April when it raised interest rates from a historic low of 0.1% to 0.35%.

After two consecutive 0.75% hikes last month and in late August, the Bank of Israel’s monetary committee this time opted for a modest 0.5% increase, although some analysts had expected another 0.75% increase. The Bank of Israel is seeking to address inflation that has been above 5% over the past 12 months in Israel. While this is well below inflation in the US and many European countries, it is still a cause for concern.







The Bank of Israel said: “The Israeli economy is experiencing strong economic activity accompanied by a tight labor market and an increasing inflationary environment. The Committee has therefore decided to continue the interest rate hike process. Interest rates will be determined in accordance with activity data and inflation trends to continue to support the achievement of policy objectives.”

The Bank of Israel added: “Inflation expectations for one year from the capital market are within the target range and one-year expectations from other sources are around the upper limit of the target range. Expectations for the second year onwards from and by 0.7% compared to the effective nominal exchange rate. However, the króna weakened by 2.8% against the US dollar. euro.”

Published by Globes, Israel Business News – en.globes.co.il – November 21, 2022.

© Copyright Globes Publisher Itonut (1983) Ltd., 2022.


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