Rates on hold, but door left open for future accomodation

ISRAEL - In Brief 24 Feb 2020 by Jonathan Katz
Rates will remain on hold for now. The MPC noted that inflation continues to be low, January's CPI surprised on the low side, and both headline and core inflation have moderated, but the MPC sees this is due mostly to shekel appreciation. They are also aware that y/y inflation may be negative in coming months, but they expect it to return to the lower bound of target (1%) by in the second half of the year. The economy continues to grow according to potential, and the labor market is tight. Fiscal policy will be restrictive in 1H20, slowing growth. Global risks moved higher due to the cororavirus, but they see this as temporary and expect a quick rebound .In this statement, the MPC notes that if the virus continues to spread and will impact Israel, they will act:"The Bank of Israel’s assessment in this scenario is that no significant macroeconomic impact is expected in Israel. If the crisis persists and spills over into additional countries, and particularly if strict preventative measures are required in Israel, it is expected to have a more significant impact. In such a scenario, the Monetary Committee has a range of tools to make monetary policy more accommodative."We think that the door is still open for a rate cut in April.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this or its contents.