Israel: Bank of Israel keeps policy rate unchanged
April 27, 2015
At its 27 April monetary policy meeting, the Bank of Israel (BoI) decided to maintain the policy rate unchanged at 0.10%. The decision met market expectations. Last month, the Bank also kept the policy rate on hold.
The BoI commented that in the first quarter of the year, economic activity indicators show that the moderate growth rate that has prevailed in the last two years is continuing. In March, growth in tourist arrivals halted, however, exports increased in annual terms. On the other hand, data from the labor market paint a positive picture. The Bank commented that, “unemployment stabilized at a low level, with the labor force participation rate and the employment rate at a high level.” In addition, the housing component of CPI increased by 2.3% on an annual basis. In February, the number of housing transactions decreased, although it remained relatively elevated.
In March, consumer prices fell 1.0% annually. The Bank attributed the annual drop in consumer prices to lower energy and food prices. The Monetary Committee said that the decision to keep the policy rate at 0.10%, “is intended to return the inflation rate to within the price stability target of 1-3 percent a year over the next twelve months, and to support growth while maintaining financial stability.”
Author: Dirina Mançellari, Senior Economist