The monetary policy panel, led by Governor Karnit Flug, kept the benchmark interest rate at 0.25%.
The bank lowered rates in July and August, and said that the effects of those cuts “have not yet been fully reflected in activity and in inflation.”
The decision to keep the interest rate for December 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.
The Bank of Israel has cut interest rates 12 times since 2011 and bought foreign currency to weaken the shekel and help exports. The currency has lost more than 11 percent against the dollar since the surprise cut in July.
The Bank of Israel said that it would continue to monitor developments and would examine the need to use “various tools” to achieve its objectives of price stability.
