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BOI sets August interest at 2.25%
Bank of Israel leaves principal interest rate unchanged; Monetary Committee said to be wary of eurozone crisis
The Bank of Israel announced Monday that its Monetary Committee has decided to leave August's key interest rate at 2.25%.
According to the BOI, the decision to leave the key interest rate unchanged was consistent with the Bank's interest rate policy, which strives to promote prices' stability and keep the inflation rate within the government goal of 1%–3%.
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"The path of the interest rate in the future depends on developments in the inflation environment, growth in Israel, the global economy, monetary policies of major central banks, and developments in the exchange rate of the shekel," the Bank said.
The Bank also attributed the decision to the fact that, "Indicators which became available this month continue to support the assessment that the rate of growth in the first half of the year stabilized at slightly below 3%.
"In contrast, June export figures, which registered a sharp decline encompassing most industries, raise the concern that the economy is in an additional process of moderation in the rate of growth. Uncertainty regarding developments in the economy is affected by, among other things, the uncertainty in fiscal policy."
The Monetary Committee further stated that the decision was meant to protect the Israeli market vis-à-vis the growing financial instability of the eurozone and the slowdown in the global economy's growth rate.
