Bank of Israel Governor Stanley Fischer
raised the shekel interest rate for November by one quarter of a percentage point to 4 percent Monday, confirming expectations that he would anticipate a predicted raise in the dollar rate.
"The Bank of Israel's models indicate the need to raise the interest rate to maintain price stability," the central bank said in a statement, noting that inflation expectations have risen over the past two months.
The Bank of Israel set 1-3% inflation as the "price stability" target for the year.
Israel's Consumer Price Index rose 0.1% in September, bringing inflation to 1.9% over the previous twelve months, due mostly to an unexpected 1.1% price surge in July.