The Central Bank kept the key interest rate at 4.5 percent because it was also concerned about the risk premium of investors in Israel, and that premium has continued to rise since the outbreak of war on October 7, 2023, according to Reuters.
The bank cut borrowing costs by 25 basis points in January after inflation fell and economic growth slowed amid the Gaza war, but it kept monetary policy unchanged in February, April, May, July and August.
14 analysts conducted by Reuters expected the interest rate not to move today. The monetary policy decision was postponed until the seventh of this month.
The annual inflation rate in Israel rose to 3.6 percent in August from 3.2 percent in the previous month, far from the government’s target level of between one and three percent after it had fallen to 2.5 percent in February.
The economy grew at an annual rate of 0.7 percent in the second quarter, slowing significantly from the 17.2 percent recorded in the first quarter.
#Israeli #Central #Bank #fixes #interest #rates #military #conflicts #increase #inflation