Bank of Israel holds key rate as inflation rises, economy recovers

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JERUSALEM (Reuters) – The Bank of Israel held its benchmark interest rate at 0.1% for a ninth straight policy meeting on Monday, citing low but rising inflation and a rapid economic recovery following a quick COVID-19 vaccine rollout.

All 17 economists polled by Reuters had said they expected the monetary policy committee to keep rates steady after doing so ever since cutting them from 0.25% more than a year ago.

Most economists do not expect a rate increase until at least 2022.

“The committee will…continue to conduct a very accommodative monetary policy for a prolonged time,” the central bank said.

Israel’s inflation rate moved to 0.8% in April from 0.2% in March, just below the government’s 1-3% annual target range. The Bank of Israel believes the rate will reach the target with the May CPI and based on bond yields, it will rise to 1.7% in a year’s time.

“Inflation expectations for the coming year from all…

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