Israel Monetary Policy October 2016

Israel

Israel: Bank of Israel keeps policy rate unchanged in October

At its 27 October monetary policy meeting, the Bank of Israel (BoI) decided to leave the policy rate unchanged at 0.10%, in line with market expectations. The rate has been held at 0.10% since February 2015.

The BoI stated that annual growth in Q2 had been revised upwards again under a third estimate, confirming the healthy acceleration from the first quarter. The available data for recent months suggests the economy has continued to grow at a steady rate since then. The labor market remains healthy, with low unemployment, a high vacancy rate and growing real wages.

Regarding price developments, the Bank noted that consumer prices continued to decrease in September (-0.1% year-on-year) and the annual change was still well below the lower end of the 1–3% target, though the downward pressure on prices has started to ease.

The next interest rate decision is scheduled for 28 November.

FocusEconomics Consensus Forecast panelists expect the monetary policy rate to end 2016 at 0.10%. For 2017, panelists see the policy rate ending the year at 0.47%.


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Israel Monetary Policy Chart


Israel Monetary Policy October 2016 0

Note: Policy Rate in %.
Source: Bank of Israel (BoI).


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