update deskIsrael at War

Bank of Israel leaves benchmark rate unchanged

The central bank's Monetary Committee said its will focus on stabilizing the markets and reducing uncertainty.

Governor of the Bank of Israel Amir Yaron (left) attends a committee meeting at the Knesset in Jerusalem, July 19, 2023. Photo by Yonatan Sindel/Flash90.
Governor of the Bank of Israel Amir Yaron (left) attends a committee meeting at the Knesset in Jerusalem, July 19, 2023. Photo by Yonatan Sindel/Flash90.

The Monetary Committee of the Bank of Israel decided on Monday to leave its key interest rate unchanged at 4.75%.

The war against terrorists in Gaza and Lebanon that began on Oct. 7 is having various economic effects, both on real activity and on the financial markets, the central bank noted.

The bank has taken a number of policy measures to deal with the situation. The financial markets are functioning and a large part of economic activity is continuing as usual, it said.

In view of the war, the Monetary Committee said its policy is focusing on stabilizing the markets and reducing uncertainty. It has activated a program to sell foreign currency and to provide liquidity in the swap and repo markets.

The interest rate path, and the use of additional monetary policy tools, will be determined in accordance with this policy and with developments in the war, as well as with data on economic activity and the inflation dynamics, in order to continue supporting the markets’ stability and achieving the policy objectives and the needs of the economy, the bank said.

“Since the beginning of the war, the Bank of Israel has been holding ongoing assessments of the effect of the security situation on various economic and financial aspects, and has taken policy steps accordingly,” said BOI Governor Professor Amir Yaron.

“I will expand on that a bit later on. Naturally, a notable portion of the Monetary Committee’s discussions held in the past two days focused on the economic effects of the war. The Monetary Committee analyzed the various processes and their effect on economic activity and inflation, and at the end of the discussions decided to keep the interest rate unchanged at 4.75%,” Yaron said.

You have read 3 articles this month.
Register to receive full access to JNS.

Just before you scroll on...

Israel is at war.

JNS is combating the stream of misinformation on Israel with real, honest and factual reporting. In order to deliver this in-depth, unbiased coverage of Israel and the Jewish world, we rely on readers like you.

The support you provide allows our journalists to deliver the truth, free from bias and hidden agendas. Can we count on your support?

Every contribution, big or small, helps JNS.org remain a trusted source of news you can rely on.

Become a part of our mission by donating today
Topics
Comments
Thank you. You are a loyal JNS Reader.
You have read more than 10 articles this month.
Please register for full access to continue reading and post comments.
Never miss a thing
Get the best stories faster with JNS breaking news updates