Bank of Israel keeps interest rate unchanged at 3%

April 24, 2011 14:44

The benchmark interest rate will remain unchanged in May at a level of 3 percent, Bank of Israel Governor Stanley Fischer announced on Sunday, defying expectations from analysts that he would raise rates by at least a quarter-point.

The central bank said that its decision was “consistent with the process of returning the interest rate to a more normal range intended to position inflation firmly within the target range, and to support the further recovery of economic activity, while maintaining financial stability.”

Explaining the main considerations behind its decision, the bank said that the recent appreciation of the shekel and recent increases in the interest rate are expected to moderate the rate of inflation in the coming months. It added that indicators of economic activity published this month support the assessment that the rapid expansion of activity and demand continued in the first quarter.

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