Bank of Israel raises interest rate by 0.4%

23 May 2022, 5:03 pm

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Bank of Israel Governor Amir Yaron speaks during a press conference in Jerusalem on April 11, 2022. (Flash90)

The Bank of Israel raises its benchmark interest rate by 0.4 percentage points — its second raise in two months after it did not raise the interest rate since 2018.

The bank lifts the key rate from 0.35% to 0.75%. Last month, it raised the interest rate from 0.1% to 0.35% after keeping it at an all-time low throughout the COVID pandemic.

The move comes as the Bank of Israel works to limit rising inflation and housing prices in Israel.

The central bank indicated it would start gradually increasing the interest rate in February, citing at the time strong economic performance alongside the COVID-19 pandemic and indications pointing to “continued strong activity.”