Interest Rate in Israel
Israel - Interest Rate
Bank of Israel leaves rates unchanged in October, but turns more hawkish
At its 14 October meeting, the Bank of Israel (BoI) left the policy rate at 0.10%.
The decision to keep rates stable at their current low level was likely driven by continued uncertainty over the economic outlook, due to the possibility of further waves of Covid-19. Moreover, although inflation has risen substantially in recent months, it remains within the 1.0%–3.0% target range—as do inflation expectations. As such, the Bank had the space to maintain an accommodative stance.
In its communiqué, the BoI took a more hawkish stance, pledging to adopt an “accommodative monetary policy” rather than the prior meeting’s promise of a “very accommodative monetary policy”. Moreover, the Bank mentioned that its various quantitative easing programs could be ended in the next few months if growth remains healthy. That said, most panelists still see the policy rate remaining at 0.10% until 2023, as current price pressures are partly transitory. Moreover, following many years of extremely weak inflation, the Bank will likely be looking to ensure market inflation expectations become solidified within the target range.
Our panelists see the policy rate ending 2021 at 0.10% and 2022 at 0.12%.
Israel - Interest Rate Data
|Policy Interest Rate (%)||0.10||0.10||0.10||0.25||0.25|
5 years of economic forecasts for more than 30 economic indicators.
Israel Interest Rate Chart
Source: Central Bank of Israel.
|Bond Yield||0.98||-1.69 %||Jan 01|
|Exchange Rate||3.46||-0.37 %||Dec 31|
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October 7, 2021
At its 14 October meeting, the Bank of Israel (BoI) left the policy rate at 0.10%. The decision to keep rates stable at their current low level was likely driven by continued uncertainty over the economic outlook, due to the possibility of further waves of Covid-19.
October 6, 2021
The Bank of Israel’s Composite State of the Economy Index grew 0.28% in month-on-month seasonally-adjusted terms in August, which was above July's 0.21% increase.
September 16, 2021
The Manufacturing Purchasing Managers’ Index (PMI), produced by Bank Hapoalim and the IPLMA came in at 54.1 in August, up from July's 46.8.
September 15, 2021
Consumer prices increased 0.30% from the previous month in August, below July's 0.39% rise.
September 15, 2021
Merchandise exports jumped 23.5% year-on-year in August (July: +33.7% year-on-year).