Most analysts see August interest rate unchanged

“Inflation will stay high over the next 12 months, at 3.6%,” analyst says.

July 24, 2011 23:20
1 minute read.
The Jerusalem Post

Stanley Fischer 311. (photo credit: Bloomberg)

Most analysts believe that Bank of Israel Governor Stanley Fischer will keep the interest rate for August unchanged at 3.25 percent on Monday.

Leader Capital Markets analyst Rafi Gozlan said, “We expect the Bank of Israel to keep the interest rate unchanged, but, a scenario of global economic recovery in the second half of the year, and the narrowing of the GDP gap and high inflation environment in Israel, will result in interest rate hikes to bring the rate to 3.75 percent by the end of the year.

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“Inflation will stay high over the next 12 months, at 3.6%.”

Clal Forex said, “We expect the Bank of Israel to keep the interest rate unchanged at 3.25%. Another interest rate hike is liable to increase sale pressure on the dollar, pushing the shekel-dollar exchange rate down to the psychological level of NIS 3.30/$.”

The Bank of Jerusalem said, “Rising inflation and media pressure over rising prices (electricity, fuel, food, and, most of all, housing), are pushing Fischer into a corner where he does not want to go so quickly. We believe that he will raise the interest rate by 25 basis points, mainly because of the pressure of prices.”

17 of the 18 analysts in a Bloomberg survey predict no change in the interest rate.

The exception is Excellence Nessuah, which predicts a 25 basis point hike to 3.5%.

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