Bank of Israel again holds key interest rate at 4.75% during war

THE Bank of Israel kept short-term borrowing rates unchanged for a fourth straight decision as expected on Monday (Nov 27), as policymakers remained focus on maintaining financial stability worried during Israel’s war against Hamas.

The central bank held its benchmark rate at 4.75 per cent – its highest level since late 2006. It had raised rates 10 straight times in an aggressive tightening cycle that has taken the rate from 0.1 per cent last April before pausing in July and again in August and October.

The inflation rate eased to 3.7 per cent in October from 3.8 per cent in September to remain above an annual target range of 1-3 per cent.

Officials have cautioned that steep rate cuts at the moment would weaken the shekel and push up inflation.

All 14 economists polled by Reuters had forecast no rate change. REUTERS