Central Banks
Israel’s Benchmark Rate Could Top 3.5% and Stay There, Official Says
- Pace of hikes slowed but more to come, deputy chief Abir says
- Rate ‘very likely’ to be above 3.5% a year from now, he says
The Central Bank of Israel in Jerusalem.
Photographer: Kobi Wolf/BloombergThis article is for subscribers only.
Israel’s central bank will likely raise interest rates above 3.5% in the coming months and keep them at that level well into next year, after adjusting its strategy following a recent spike in inflation, said Deputy Governor Andrew Abir.
The bank slowed the pace of its rate hikes to 50 basis points on Monday, surprising economists who had expected a third straight increase of 75 points. Policymakers expect inflation, currently running above 5%, to begin falling toward the end of the first quarter of 2023, and to drop within the government’s 1% to 3% target range in the second half of the year, Abir said in an interview after the decision.