According to the Bank of Israel the new interest is intended to help cut the cost of credit and tostrengthen the economy's ability to handle the slowdown
Bank of Israel Governor, Prof. Stanley Fischer, cut on Monday the interest rate by 0.75% to 1.75% - a new historic low.
In a press release the central bank stated: "The current reduction in the interest rate is intended to help cut the cost of credit and tostrengthen the economy's ability to handle the slowdown in economic activity and the implications of the global economic crisis”.
The Bank added that the decision to lower the interest rate will help strengthen the economy's ability to cope with the implications of the global economic crisis and support real activity. It is consistent with the return of inflation to the target range of 1%-3% within the next few months.
Lowering the interest rate is considered an economic stimulus, cutting the cost of financing for companies and household loans.
Economists had expected interest to be lowered by 0.5%, and some had forecasted a sharp drop of 1%.
Fischer drops interest rate to 1.75%
According to the Bank of Israel the new interest is intended to help cut the cost of credit and tostrengthen the economy's ability to handle the slowdown
05.01.09 / 00:00
•
More articles that may interest you
FICC participated at an EU & Eurochambers workshop in Tunisia
Israeli Shippers' Council challenge congestion surcharge
Israeli Shippers' Council challenges THC
Exports of services down 1% in third quarter of 2008
FAA Changes Israel’s Aviation Safety Rating to Category 2
El Al to operate direct flight to Brazil
More news from Industry & Trade Section
>Manufacturers Association president calls for 4 day work week/29.12.08
>Adva Center: Israeli growth rate - one of lowest in world/22.12.08
>Bank of Israel: Israel economic performance index down 0.4% in Nov/22.12.08
>CBS: the Israeli economy has entered a slowdown/22.12.08
>BOL: negative inflation rate of -0.7% in 2009/22.12.08
>Gov. Tim Pawlenty in Israel leading trade mission/15.12.08
>OECD: Israel is first Middle Eastern state to sign anti-bribery convention/15.12.08
>CBS: trade deficit averaged at $1.2b per month in 2008/15.12.08
>Employment Ministry: Israeli employment market registers negative balance/15.12.08
>Merrill Lynch: Israel GDP growth cut by 75% in 2009/15.12.08