Interest rate cut to all-time low

Move part of Bank of Israel's policy of price stability, aims to limit annual inflation to 1-3%.

TA stock exchange 224 88 (photo credit: Bloomberg)
TA stock exchange 224 88
(photo credit: Bloomberg)
Bank of Israel Governor Stanley Fischer on Monday evening lowered interest rates by half a percent to 3.25%, the lowest rate in Israel's economic history. The Bank of Israel made the announcement as part of its policy of price stability and in accordance with its aim of limiting inflation to 1-3% annually. Earlier Monday, the US dollar jumped 0.11 percent on the foreign exchange market, trading at NIS 3.52. The rise in the dollar's rate was said to be in anticipation of the announced interest rate cut. Investors were also waiting for a Bank of Israel report set to be published in two weeks' time. Monday was the first day in which the central bank began buying dollars on a daily basis, in accordance with the decision made last week to buy $10 billion over the next two years, an average of $25 million per day, as announced last Thursday. The shekel-euro rate dropped 0.22% to NIS 5.42 in Monday's session. With the rise in the dollar, the Tel Aviv Stock Exchange saw drops in certain indexes. The Tel Aviv 100 was down 0.32% to 946.35, whilst the Tel Aviv 25 increased 0.07% to 1028.08.