Sun, 09 May 2021

Israel keeps base interest unchanged at 0.1 pct

20 Apr 2021, 02:05 GMT+10

JERUSALEM, April 19 (Xinhua) -- Israel's central bank announced on Monday that it will keep the base interest rate for the next six weeks at 0.1 percent.

The decision was made against the background of the coronavirus crisis that affected the Israeli economy and low inflation rate, which has risen by 0.2 percent in the last 12 months, still far below the government target of 1 to 3 percent.

However, the bank noted that the Israeli economy is recovering at a rapid pace, following the exit from the third lockdown imposed in the country in late December, 2020.

The bank forecasts that GDP will grow by 6.3 percent in 2021, while the unemployment rate is expected to decline from 12 to 7.5 percent by the end of the year.

Inflation expectations for this year from all sources increased, and are at the lower bound of the inflation target range, while medium and long term inflation expectations are anchored within the target range, according to the bank.

The bank warned that despite the expected rapid grow, there are still challenges to economic activity in view of the health risks in Israel and abroad.

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