Bank of Israel leaves benchmark interest rate unchanged at 1¼%

By Richard Connell

New York, Jan. 25 - The Bank of Israel left its benchmark interest rate unchanged at 1¼% at its meeting on Monday, according to a news release issued by the bank.

The bank noted that the CPI in December showed no change, in contrast to earlier predictions of an increase by up to 0.4%, and that overall for 2009 inflation stood at 2.8%, within the upper end of the target range.

Looking forward, the bank forecast inflation over the next 12 months to stand at 2.3%, down from earlier predictions of 2.7%.

The bank looked at data which showed a substantial improvement in the domestic economy of Israel in the fourth quarter of 2009, as all industries apart from the hotel industry showed increases, while unemployment decreased.

The bank revised its growth forecast for 2010 upwards but warned that uncertainties remained concerning the strength of the global economic recovery.

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