Israel Monetary Policy November 2019

Israel: Bank of Israel leaves rates unchanged in November; forward guidance remains dovish

At its 25 November meeting, the Monetary Committee of the Bank of Israel (BoI) kept the key interest rate unchanged at 0.25%, confounding market expectations of a rate cut.

The Bank decided to stand pat despite inflation remaining below the BoI’s 1.0%3.0% target range for the fifth straight month in October amid a strong shekel and low oil prices. Still-solid economic activity likely gave the Bank the leeway to stay on the sidelines, with the BoI opting for other measures to tame the shekel—the Bank purchased USD 314 million in foreign currency in October, the first major intervention this year.

The Central Bank remained dovish in its press release. The BoI warned of the potential impact of domestic political uncertainty on the economy, and highlighted that shekel strength continued to make it difficult to boost inflation. According to the Bank: “it will be necessary to leave the interest rate at its current level for a prolonged period or to reduce it” to ensure inflation stabilizes at the target midpoint. FocusEconomics panelists are broadly in agreement, with several seeing easing by end-2020.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest