The Bank of Israel today raised its interest rates, at a rate that exceeded analysts’ estimates, in the first move to tighten its policy since 2018 in order to deal with the inflation rally.
In particular, the bank’s monetary policy committee raised the interest rate to 0.35% from 0.1% previously. Nearly two-thirds of analysts in a Bloomberg poll put the increase at 0.25%.
“Conditions allow the gradual process of raising interest rates to begin,” the central bank said in a statement. “The rate of interest rate hikes will be determined by the data for [οικονομική] activity and the evolution of inflation in order to ensure that the policy objectives are achieved “.
Annual inflation accelerated to 3.5% in February, exceeding the government target for a second month. The central bank also revised its estimates for the course of inflation in 2022 to 3.6% from the January forecast of 1.6%. Inflation is expected to slow in 2023 to 2%.
At the same time, the bank expects GDP to grow by 5.5% in 2022 and 4% in 2023.
Source: Capital
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