"Bloomberg's" poll of 23 capital market analysts yielded a unanimous opinion that the Bank of Israel will keep the interest rate for July unchanged at 3.25%.
A "Bloomberg" poll of 23 capital market analysts yielded a unanimous opinion that the Bank of Israel will keep the interest rate for July unchanged at 3.25%. This is the first time in months that the analysts are unanimous about an upcoming interest rate decision.
Last month, the Bank of Israel raised the interest rate for June by 25 basis points to rein in inflation and rising home prices. However, in the past month, the slowdown in the US economy has worsened and Greece's debt crisis has consumed the EU. Prices for oil commodities have fallen, including an 11% drop in the price of oil to $91 per barrel, which will ease inflationary pressures in the coming months.
Leader Capital Markets analyst Rafi Gozlan says holding the interest rate steady is only temporary, and that the rate hikes will resume. "The lower than expected rise in the last three Consumer Price Indexes (CPI), compared with early forecasts, the drop in inflation expectations, high uncertainty in global markets amid concerns about the debt crisis in Europe and the strength of the slowdown in the US all support keeping the interest rate unchanged," he said. "However, this is only a time-out in view of the high inflation environment due to the narrowing of the production gap and the negligible real interest rate."
Published by Globes [online], Israel business news - www.globes-online.com - on June 26, 2011
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