Central Bank Keeps Base Rate Unchanged at 2%

The Bank of Israel's Monetary Committee leave December rates unchanged at 2%.

The Bank of Israel's Monetary Committee left December interest rates unchanged at 2%.

The decision had been widely expected after Governor Stanley Fischer surprised most everyone when he cut rates a month earlier by 0.25 percentage point.

The central bank said in its announcement yesterday evening that the main factors behind its decision were the signs of an economic slowdown, with growth in the third quarter only an annualized 2.9%, the lowest in two years. Also, the October consumer price index fell 0.2%, putting inflation iat about the middle of the government's target range of 1% to 3% a year

The central bank needs to examine the effectiveness of the mortgage restrictions it imposed last month, said Migdal Capital Markets chief economist Yossi Schwimmer.