BOI leaves November interest rate unchanged 19 October 2017
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BOI Monetary Committee leaves November interest rate unchanged

  • 10/19/2017
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    The BOI Monetary Committee decided to keep the interest rate unchanged at 0.1 percent and intends to maintain the accommodative policy as long as necessary in order to entrench the inflation environment within the target range.
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    Copyright: Bank of Israel
     
     
    • ​The inflation environment remains very low. The increase in annual inflation resumed, but inflation remains lower than the target range, and there has been no significant change in expectations. Short-term expectations are below the target range, while long-term expectations are anchored within the range.
    • Indicators of real economic activity support the assessment that the economy will continue growing at a rate that is in line with potential growth, after some slowdown in the first half of the year.  The economy is apparently returning to more balanced growth in terms of the composition of uses.
    • The picture of global economic activity continues to improve. The International Monetary Fund raised its growth forecast for all major economies and for world trade. Inflation remains lower than the central bank targets. In the US, the federal funds rate is expected to increase one more time this year, and the ECB is expected to announce a gradual reduction of quantitative easing.
    • In recent months, the appreciation of the shekel has resumed. Since the last monetary policy discussion the shekel strengthened by about 3 percent in terms of the nominal effective exchange rate. Over the past 12 months, the appreciation in terms of the effective exchange rate was 6.1 percent.
    • The increase in home prices resumed, although at a more moderate rate than in the past. Most indicators point to a slowdown in activity in the housing market.

    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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