The Bank of Israel kept the interest rate at 0.75%.
The Bank of Israel today announced that it is keeping the interest rate for May unchanged at 0.75%. This is the first time that the announcement was made at 4 pm; until now, the Bank of Israel announced the interest rate at 5:30, after the Tel Aviv Stock Exchange (TASE) closed.
The Bank of Israel cited the following reasons for the decision: the Consumer Price Index (CPI) rose by 0.3% in March and by 1.3% over the preceding 12 months, while 12-month inflation expectations are below the midpoint of the target; the economy grew more quickly in the first quarter led by domestic demand and services exports, despite a virtual standstill in goods exports, while employment increased; and the shekel weakened by 0.4% in terms of the nominal effective exchange rate and the effective exchange rate has remained stable for the year to date.
The Bank of Israel added that the IMF cut its global growth and world trade volume forecasts by 0.1%, mainly because of projected slower growth in emerging markets. As for the Israeli housing market, it says that prices continued to rise in April by an annualized 6-7%, and that the rate of mortgages taken out remains elevated, although there is stabilization, at a lower level, in the risk characteristics of new mortgages. The effect of recent policy measures on home prices and sales is still uncertain.
Published by Globes [online], Israel business news - www.globes-online.com - on April 28, 2014
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