Bank Of Israel Raises Interest Rate For First Time Since 2018 to Limit Inflation

The Bank of Israel’s monetary policy committee said Monday it was raising the benchmark interest rate to 0.35% from the current 0.1%, as it has signaled it would, in order to limit rising inflation and housing prices in Israel.
The announcement marks the first time the central bank has decided to raise the interest rate since November 2018.

The central bank indicated it would start gradually increasing the interest rate in February, citing at the time strong economic performance alongside the COVID-19 pandemic and indications pointing to “continued strong activity.”
The bank also cited the inflation rate, which had risen above its target range since the last policy meeting in early January, as well as rising consumer and housing prices.
The inflation rate in Israel reached 3.5% in February, slightly above the bank’s upper range of 3%, and is expected to reach 3.6% during 2022, while dropping to 2% in 2023, the bank said, estimating that the interest rate would go down to 1.5% in about a year.
Still, despite “inflation in Israel rising in the past few months, it is still significantly lower than inflation rates in most countries in the world,” the bank said in a statement.