Netanyahu in English statement: Bank of Israel to remain independent

After Foreign Minister Eli Cohen and Likud MK David Bitan criticized the Bank of Israel’s decision to raise the benchmark interest rate to its highest level since 2008, and said the bank should be made to stop the hikes, PM Netanyahu issues a statement in both Hebrew and English stressing that he stands behind the bank.

“The Bank of Israel Law was passed under my leadership and ensures the independence of the Monetary Committee, led by the governor, in determining the interest rate. Nothing will change that.”

The English statement appears intended to calm markets as Israel’s economy takes a hit amid the ongoing legislative effort to radically change the judiciary.

Finance Minister Bezalel Smotrich also backed the bank yesterday, saying: “I stand firmly against populist statements threatening the Bank of Israel’s independence.”

The bank increased the benchmark interest rate for the eighth straight meeting yesterday, raising its key lending rate by 50 basis points to 4.25 percent, as the central bank battles rising inflation pressure and a weakening shekel.

Today, the shekel dropped more than 2% as government bonds and shares slid in Tel Aviv as well, the day after the government approved a key bill in the judicial overhaul in its first reading. Leading businesspeople and economists have warned the legislation could cause the country lasting economic damage.