BOI keeps interest rate unchanged 9 July 2018
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BOI keeps interest rate unchanged

  • 7/9/2018
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    The Monetary Committee intends to maintain the accommodative policy as long as necessary in order to entrench the inflation environment within the target range. BOI will continue to monitor developments and will act to attain the monetary policy targets.
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    Copyright: Bank of Israel
     
     
    ​(Communicated by the BOI Spokesperson)
    The Bank of Israel Monetary Committee decided today (July 9, 2018) to keep the interest rate unchanged at 0.1 percent.

    • The inflation environment continues to rise gradually, supported by the accommodative monetary policy, and is approaching the price stability target range. Inflation over the 12 months ending in May was 0.5 percent, and inflation according to adjusted indices remains below the target. Since the last interest rate decision, there has been an increase in inflation expectations from the various sources, and they are near or slightly above the lower bound of the price stability target range.
    • Following rapid growth in the first quarter, economic growth in the second quarter is expected to stabilize at a pace that is in line with potential. Goods exports have moderated in recent months. The labor market remains tight and wages are increasing, while more companies are reporting difficulties in hiring workers.
    • Data regarding the global economy remain positive, although global growth seems to be losing momentum. In recent weeks, the risk of an intensifying trade war has again increased. Inflation in the US converged with the Fed’s target, and the Fed is continuing to raise the interest rate. In the other advanced economies, inflation is rising gradually, while monetary policy remains very accommodative.
    • The effective exchange rate remains relatively stable. Since the previous interest rate decision, there has been a depreciation of about 1 percent, following an appreciation in the weeks that preceded it.
    • Home prices have declined by 2.4 percent since peaking in August of last year, while the rise in rental prices has accelerated somewhat. Both building starts and investment in residential construction show a significant decline.

    The Monetary Committee intends to maintain the accommodative policy as long as necessary in order to entrench the inflation environment within the target range. The Bank of Israel continues to monitor developments in inflation, the real economy, 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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