Bank of Israel leaves benchmark interest rate unchanged at 2%

By Richard Connell

New York, Nov. 23 - The Bank of Israel left its benchmark interest rate unchanged at 2% at its meeting on Tuesday, according to a news release issued by the bank.

Inflation in Israel rose by 0.3% in October, the average of forecasters' predictions, and since the beginning of 2010 has increased by 2.2%.

Looking forward, the bank expects inflation to climb slightly above the upper limit of the target range in the first half of 2011, before returning to within the target range.

Economic expansion grew in the third quarter, but at a lesser rate than previously, as the GDP increased in the third quarter at a rate of 3.8%, down from the 4.5% increase in the second quarter of 2010.

The bank stated that keeping the interest rate unchanged at 2% was consistent with returning the interest rate to a more normal level, while supporting growth and positioning inflation within the target range.

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