BOI Monetary Committee keeps interest rate unchanged 20 May 2019
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BOI Monetary Committee keeps interest rate unchanged at 0.25 percent

  • 5/20/2019
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    The BOI Monetary Committee assesses that the rising path of the interest rate in the future will be gradual and cautious, in a manner that supports a process at the end of which inflation will stabilize around the midpoint of the target range.
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    Copyright: Bank of Israel
     
     

    (Communicated by the BOI Spokesperson)​

    The Bank of Israel Monetary Committee decided today (Monday, May 20, 2019) to keep the interest rate unchanged at 0.25 percent.

    • The inflation environment remains stable above the lower bound of the target range. The CPI for April was lower than pre-publication assessments, but CPI readings for the previous three months surprised to the upside, and year-on-year inflation is at a level similar to that of recent months. One-year inflation expectations and forecasts are slightly above the lower bound of the target range, and forward expectations for medium and longer terms remained near the midpoint of the target.
    • For the year to date, the shekel has strengthened by 6 percent in terms of the nominal effective exchange rate, and since the last meeting it has appreciated by 1.2 percent. The appreciation is the main factor that is delaying the continued increase of the inflation rate toward the midpoint of the target.
    • The high growth rate in the first quarter was impacted markedly by stronger new vehicle sales, along with solid growth in exports. Net of this effect, the economy grew at a rate slightly below its potential. The labor market remains tight: The participation and employment rates increased slightly from already record levels, and wages continue to rise, led by the business sector.
    • The risks to the global economy increased, mainly in view of the increasing severity of the "trade war", despite first-quarter growth in major economies surprising to the upside. The slowdown in world trade continues, and includes emerging markets as well. The IMF again revised downward its forecasts for world trade and growth for most regions.
     
    The Committee assesses that the rising path of the interest rate in the future will be gradual and cautious, in a manner that supports a process at the end of which inflation will stabilize around the midpoint of the target range, and that supports economic activity. The Bank of Israel continues to monitor developments in inflation, the real economy, fiscal policy, the financial markets, and the global economy, and will act to attain the monetary policy targets in accordance with such developments.

     
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