The Bank of Israel delivered a bigger interest-rate increase than anticipated by most economists, tightening monetary policy for the first time since 2018 in response to above-target inflation at a time when the economy has been growing stronger than forecast.
The monetary committee lifted its key interest rate to 0.35% from 0.1% on Monday. Almost two-thirds of analysts surveyed by Bloomberg predicted a hike to 0.25%. Governor Amir Yaron has said the central bank may deliver more than one increase to stem the pace of price growth.
The shekel maintained gains after the announcement and traded 0.4% stronger against the dollar as of 4:17 p.m. local time.
“Conditions allow for the start of a gradual process of increasing the interest rate,” the central bank said in a statement. “The pace of raising the interest rate will be determined in accordance with activity data and the development of inflation, in order to continue supporting the attainment of the policy goals.”
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