Fischer Set to Hike Interest by 0.25%

Most analysts believe Bank of Israel Governor Stanley Fischer will raise the interest rate for January 2010 by 0.25%, bringing it to 1.25%. It would be the second hike of the base interest rate by that amount in two months. A few analysts believe the head of the central bank will leave interest unchanged at 1.0% for another month and raise it for February.

The main reasons for raising interest are the high consumer price index for November - 0.3% - and the even bigger jump of 0.4% that is expected for December, along with high export figures in recent months. Other contributing factors include the relatively high inflation and low real interest rates.