Bank of Israel lowers interest rate to 0.1%

The monetary committee of the Bank of Israel, chaired by governor Karnit Flug, announces lowering the interest for March by 0.15 percent to the lowest level in the history of the country – 0.1%. Many analysts were surprised by the decision, as some thought the bank would not change the interest rate or at most lower it by one or few hundredths.

Following the announcement, the Tel Aviv 25 Index rose by 0.5% to a record-high 1,500 points. Other bonds, including long-term government bonds, jumped by as much as 0.85%. The US dollar, traded this morning at NIS 3.85, now trades at NIS 3.91, 1.4% higher.

“The monetary committee believes that in light of the increased speed of revaluation and its possible effects on activity and inflation, lowering the interest rate to 0.1% is the best decision at this time if one want to stay true to policy targets,” the bank said in a statement.

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