The Bank of Israel Monetary Committee, headed by Governor Prof. Amir Yaron, has kept the interest rate unchanged at its historic low of 0.1%.

The Bank of Israel Research Department has said that the interest rate range would be between 0.1%-0.25% at the end of the year. The bank is not concerned about inflation which it sees at 2.5% in 2021 and falling to 1.6% in 2022. The Bank of Israel sees inflation of 1.7% over the next 12 months.

The Bank of Israel has revised its GDP growth forecast upwards to 7% from 5.5% and sees 5.5% growth in 2022. The bank expects the government to pass the budget next month and sees the budget deficit narrowing to 6.4% of GDP in 2021 and 4% in 2022. The ratio of debt to GDP will be 73.5% in 2021, the Bank of Israel forecasts, and 73% in 2022.

In a press conference convened after the announcement Yaron said, "As long as nothing extreme happens the bond purchasing program will end in November-December."

Published by Globes, Israel business news - en.globes.co.il - on October 7, 2021

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