Interest rates set to stay at 0.5% for July
Bank of Israel Governor Stanley Fischer is expected to announce tomorrow that the base interest rate for July will remain at 0.5% - the bank's lowest rate ever - for the fourth month in a row. The central bank says low interest rates coupled with its purchases of dollars and government bonds support economic growth and help the economy cope with the global economic crisis.
Bank of Israel officials hope that keeping the base interest rate at 0.5% will help the government reach its annual inflation target of between 1% and 3% while encouraging economic activity and keeping the financial system stable.
According to the central bank, the 12-month inflation forecast is on track with the government's goals. Financial and macroeconomic data point to a flattening out of negative economic trends, they say, and central banks around the world are using low interest rates and other monetary tools to assist their economies.