The Bank of Israel held its benchmark interest rate unchanged at 3.25%. The Bank noted: "In the first half of the year the Bank of Israel raised the interest rate markedly. At the same time, steps were taken by the Bank of Israel and the Ministry of Finance in the housing market. In addition, the shekel appreciated over recent months and there was a decline in commodity prices. The impact on inflation of these items is expected to be felt in the future. In light of these issues, and the marked increase of risks in the global economy, it was decided to leave the interest rate at its current level at this time."
Previously the Bank increased the interest rate by 25 basis points to 3.25% at its May meeting this year. Israel recorded annual inflation of 4.1% in May, compared to 4.0% in April, and 4.3% in March; above the Bank's inflation target range of 1-3%. Israel reported GDP growth of 4.8% (annualised) in the March quarter.
