Israel keeps rate steady, growth forecast to be trimmed

(Before It's News)

    The Bank of Israel left its benchmark interest rate unchanged at 2.25 percent, as expected, as the economy continues to expand at its recent pace and inflation remains within the bank’s target range.
    But global risks remain high and this could affect Israel’s economy, the central bank cautioned, adding it expected to trim its growth forecast next month.
    “The level of economic risks from around the world, due to the developments in Europe, remains high—leading to concerns of negative effects on the domestic economy,” the Bank of Israel said in a statement, adding:
   ”Second quarter macro figures which became available this month indicate continued deterioration in the state of the economies in the eurozone, the UK, Japan, and emerging markets. In contrast, there was a slight improvement in US economic activity this month.”
    The Bank of Israel cut interest rates twice this year for a total cut of 50 basis points. Rates have been on an easing path since July 2011 when they were cut from 3.25 percent.

    Consumer price inflation rose slightly in July to an annual rate of 1.4 percent from 1.0 percent in June due to higher housing costs. On a seasonally adjusted basis, the bank said inflation has been running at an annual rate of 0.9 percent, below the bank’s target of 1 to 3 percent.

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