Bank of Israel leaves benchmark interest rate unchanged at 1½%

By Richard Connell

New York, June 29 - The Bank of Israel left its benchmark interest rate unchanged at 1½% at its meeting on Tuesday, according to a news release issued by the bank.

Inflation in Israel rose by 0.4% in May, in line with expectations, and over the last 12 months inflation was 3%, the upper limit of the inflation target range.

Looking forward, the bank forecast inflation over the next 12 months to stand at 2.6%.

The bank also looked at recent economic data, which showed a mixed outlook; while the GDP growth rate increased to 3.6%, both domestic consumption and exports were stagnant.

The bank also pointed out that risks and uncertainties continue to exist in the global economy, particularly Europe, which could affect the economy of Israel.

The bank again stated that keeping the interest rate unchanged at 1½% is consistent with the process of returning the interest rate to a more "normal" level.

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