Fischer leaves key interest rate unchanged

The governor of the Bank of Israel, Stanley Fischer, will leave the main interest rate for May unchanged at 3%. The benchmark rate has been raised nine times since August 2009
 
The governor of the Bank of Israel, Israel's central bank, Stanley Fischer announced last week, that he had decided to leave the main interest rate for May unchanged at 3%.
 
In a press release the Bank noted that a strong currency and recent increase in policy rates are likely to moderate inflation in the coming months. The benchmark rate has been raised nine times since August 2009, including a half-point increase announced in late March.
 
Bank of Israel said that inflation expectations for the next twelve months have also declined due, in part, to April's interest rate hike.
 
According to data from the statistical office, inflation increased to 4.3% in March from February's 4.2%. The rate remained above the central bank's 1%-3% target. Meanwhile, the central bank revised up this year's projected Israeli GDP to 4.5% from 3.8% estimated earlier.
 
The press release noted however that recent appreciation of the shekel will be a disinflationary force. The shekel is trading at a 2-1/2 year high of 3.405 against the dollar, having gained 8% since early February.