The Bank of Israel will not raise interest rates
2022.11.21 10:02
The Bank of Israel will not raise interest rates
Budrigannews.com – In its sixth meeting in a row, the Bank of Israel raised its benchmark interest rate by half a point on Monday, citing strong economic growth, inflation above 5%, and a tight labor market.
The key rate was increased from 2.75 percent by the central bank to 3.25 percent, the highest level since September 2011.Policymakers began aggressively increasing the rate from 1% in April.
However, the central bank chose a half-point increase this month after two increases of three-quarters of a point in August and October.
“The (monetary) committee has therefore decided to continue the process of increasing the interest rate,” and data on economic growth and inflation will determine the rate at which this will continue in the future.
Israel’s yearly expansion rate increased to 5.1% in October from 4.6% in September and was barely short of a 14-year high of 5.2% in July – well over the public authority’s 1%-3% yearly objective reach and fuelling public outrage at spiking living expenses.
However, the central bank noted that expectations for inflation in a year were within the range of the target.
In parallel, Israel’s economy expanded at an annualized rate of 2.1% in the third quarter, down from 7.3% in the previous three months.Israel’s unemployment rate increased to 4.3% in October from 3.9% in September, according to official data released on Monday.
The economy is expected to expand by 6% in 2022, then by 3% the following year, according to the Bank of Israel.
The Bank of Japan’s governor, Amir Yaron, told Reuters shortly after the central bank made its rate decision that he saw rates peaking at “3 plus percent” as a sign that the tightening cycle was about to end.
