The Bank of Israel predicted that its interest rate would peak at 4% in 2023, but with inflation refusing to be tamed the rate seems set to go higher.
Globes reports for the eighth time since last April, Governor of the Bank of Israel Amir Yaron is expected to announce an interest rate hike today. The decision will be made at a meeting of the bank’s Monetary Committee later in the day. The central bank’s rate currently stands at 3.75%.
In the wake of last week’s Consumer Price Index reading, which was higher than forecast, and indicated inflation running at its highest rate in fourteen years, analysts have become strengthened in their view that the Bank of Israel will raise its rate by 0.5% to 4.25%, which will be the highest level since 2008.
If this is what happens, we will once again see the limitations of the Bank of Israel’s forecasts. Just last month, the bank estimated that its interest rate would peak at 4% in the course of 2023. In January 2022, it estimated that its interest rate at the end of the year would be 0.1-0.25%. In fact, last year ended on an interest rate of 3.25%, because of the upsurge in inflation in Israel and around the world.
Source - Globes/Twitter - Image - Shutterstock