Bank of Israel maintains benchmark interest rate at 1¾% for February

By Tali David

Minneapolis, Jan. 28 - The Bank of Israel decided to keep its benchmark interest rate at 1¾% for February, according to a bank notice.

According to a bank press release, the Consumer Price Index increased by 0.2% in December.

The rate of inflation over the last 12 months was 1.6%, within the target range.

Expectations based on the average of forecasters' inflation projections were stable this month, at 1.9%, as were inflation expectations based on over-the-counter CPI futures contracts offered by banks, at 1.8%.

According to the statement, expectations calculated from the capital markets declined this month to 1.5%, seasonally adjusted, or 2.3% without seasonal adjustment. Inflation expectations for two years and longer increased and currently range from 2.5% for shorter terms to 2.9% for longer terms.

The decision to keep the interest rate for February 2013 at 1¾% is consistent with the Bank of Israel's interest rate policy which is intended to entrench the inflation rate within the price stability target of 1% to 3% a year over the next 12 months and to support growth while maintaining financial stability.

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