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Stanley Fischer decided yesterday, as most forecasters had predicted, to leave February interest rates unchanged. Yesterday's interest decision was probably the most complicated and problematic he has had to make since he became Bank of Israel governor almost three years ago.

There are storms raging in both global and local markets, and these have pushed in opposite directions. On one side, inflation has reared its head once again in recent months; the December CPI was 0.6%, almost twice forecasts; and inflation for 2007 totaled 3.4%, higher than the government's 1-3% target range. These facts would normally have forced the central bank to raise rates.

However, world markets have been tumbling in past weeks, starting with the U.S. subprime mortgage crisis, a wider credit crisis and now continuing with major losses around the world. These losses did not pass over the Tel Aviv Stock Exchange either despite good macroeconomic indicators; and this was a vote in favor of lowering rates.

In the end Fischer decided to leave well enough alone for one simple reason: the moves by his U.S. counterpart, Ben Bernanke. Last week the Fed lowered rates 0.75% in a surprise, unplanned move - the biggest rate cut in more than 20 years. According to forecasts, including those of the Bank of Israel, too, Bernanke will again lower rates this week by another 0.5%. From equal interest levels, the Fed will in a week drop 1.25% below Israeli rates.

In Fischer's opinion, the dramatic rate cuts in the U.S. and the resulting 1.25% gap will help serve his goal of reducing inflation - once the markets have digested the change. Imports will drop in price, and Fischer assumes stock markets may again rise. Leaving Israeli rates untouched will broadcast to markets - and foreign investors - stability and security. No less important, it will also provide a full month to adjust to the major changes occurring around the world.