Israel's BOI Monetary Committee, headed by Governor Dr. Karnit Flug, left its benchmark interest rate for November unchanged at 0.25%.
This marks the second consecutive month that the bank has left the rate unchanged after cuts in August and September.
The BOI hinted, however, that it would use other means to stimulate economic growth such as a quantitative easing plan: “The Monetary Committee is of the opinion that the effects of the recent interest-rate reductions, which brought the interest rate to a level of 0.25%, have not yet been fully reflected in activity and in inflation, and in light of that decided to keep the interest rate unchanged this month.”
The decision to keep the interest rate for November 2014 unchanged at 0.25% is consistent with the Bank of Israel's monetary policy, which is intended to return the inflation rate to within the price stability target of 1–3% a year over the next twelve months, and to support growth while maintaining financial stability.
The path of the interest rate in the future depends on developments in the inflation environment, growth in Israel and in the global economy, the monetary policies of major central banks, and developments in the exchange rate of the shekel.
