There is a slowdown in the rate of growth for overall credit. Speculations: the figures reinforce a possible 0.8% cut in interest rates.
A negligible 0.1% rise in money supply in the economy was recorded for August 1996, after a 4.1% rise in the previous month.
According to Bank of Israel figures, last month’s money supply was NIS 16.64 billion, a NIS 100 million rise over July 1996. During period between May-August 1996, money supply rose only 3.2%, or half the rate of growth recorded for the first four months of the year.
It is speculated that Bank of Israel Governor Ya’akov Frenkel will announced a 0.8% cut in shekel interest rates at the end of this month, following a slowdown in both inflation and the rate of growth for money supply in the economy.
Bank of Israel’s figures show a 9.6% rate of growth in money supply for the first 8 months of 1996, or an annual rate of 14.5%. This is in line with the market’s economic development.
A slowdown in the rate of growth for overall credit in the economy was noted in August. A slight 0.3% rise in bank credit was recorded, after an average 2% monthly growth in the preceding three months.