Israel raises rates again as central bank expects inflation
Housing prices are also on the rise in Israel, and interest rates are now at their highest levels since 2008.
Israel’s central bank raised interest rates again Monday.
The Bank of Israel’s Monetary Committee raised its interest rate by 0.5 percentage points to 3.75%, citing inflation, among other reasons. This is the highest interest rate in the country since 2008, and constitutes the seventh consecutive rate hike since the bank started raising rates last year.
The following are some other key takeaways from the Bank of Israel, according to a press release.
- Inflation was 5.3% over the course of 2022.
- Israel’s economic growth rate “appears to have slowed relative to the first half of 2022.”
- Home prices increased at a “significantly high rate” in 2022.
- The shekel weakened 1.6% against the US dollar since the previous policy decision in November.
Why it matters: The Bank of Israel began raising interest rates in April in a bid to reduce inflation. Rising inflation in Israel has become a political issue. Prime Minister Benjamin Netanyahu, who returned to power last month, campaigned on lowering inflation. The prices of fuel, electricity and water are also on the rise.
