No need for negative rates now, expansion so far may be enough - #Israel central banker | Reuters

No need for negative rates now, expansion so far may be enough - Israel central banker | Reuters

The Bank of Israel sees little reason to push its key rate to zero or below given low borrowing costs for consumers and businesses and may not need to boost other stimulus measures, a senior central banker said on Monday.

Bank of Israel Deputy Governor Andrew Abir told Reuters the central bank could hold off with further action if the economy started to recover from the coronavirus pandemic, no more lockdowns are needed and access to credit grows.

He also said there has not been much need for significant intervention in the currency market recently because the shekel has mostly stayed in a fairly narrow range.

The shekel ILS=, which has appreciated more than 2% versus the dollar so far in 2020 and is near a 12-year peak, weakened to a rate of 3.384 from 3.38 prior to Abir's remarks.

The Bank of Israel last Thursday held its benchmark interest rate ILINR=ECI at 0.1% for a fourth straight decision, while expanding its government bond purchasing and boosting credit to small businesses.