Bank of Israel slashes rates by 50 basis points
by Richard Kilner
Story link: Bank of Israel slashes rates by 50 basis points
Governor Stanley Fischer, the head of the Bank of Israel, has defied expectation by lowering the nation’s interest rates to their lowest ever.
Fischer decreased the central bank rate to 3.25%, a cut of 50 basis points, and attributed his move to the necessity of maintaining stability in prices.
The prime interest rate also dropped by 50 basis points, from 5.25% to 4.75%.
The primary objective of the Bank of Israel is to keep inflation between 1% and 3%.
Although a half point cut in interest rates had been widely forecast by industry analysts, Fischer sprung a surprise by stating that the central bank was to begin purchasing $25m worth of dollars every business day and, in so doing, to bolster Israel’s foreign currency reserves by $10bn within two years.
Recently the shekel has been performing strongly, perhaps too strongly, against the dollar, and the surprise move is seen as one way to attempt to weaken it to a more preferable level.
Over the course of the last two months Fischer has lowered the interest rate by a full 100 basis points to its lowest ever level.
Add to Bookmarks:
Related stories to: Bank of Israel slashes rates by 50 basis points
Israel cuts interest rates by 25 basis points ...Israel cuts interest rates by 50 basis points ... »
No comments yet.Leave a comment
Previous: « Exim Bank of India agrees credit line to Africa
Next: HBOS shares soar by 15% »
Visited 374 times, 1 so far today