Bank of #Israel stays aggressive on inflation with half-point rate hike | Reuters

Bank of Israel stays aggressive on inflation with half-point rate hike | Reuters

The Bank of Israel on Monday raised its benchmark interest rate (ILINR=ECI) by another half a percentage point, the eighth straight meeting it has increased rates, citing inflation running above 5% and concerns over wages and fiscal spending.

The central bank lifted its key rate to 4.25% - its highest level since late 2008 - from 3.75%. In April, policymakers began raising the rate from 0.1% and have been aggressive during a front-loading process.

"The Israeli economy is recording strong economic activity, accompanied by a tight labour market and an increase in the inflation environment," the Bank of Israel said, noting that the shekel remains volatile.

Most analysts believe the tightening cycle is close to over since officials last month said the terminal rate would be 4% or a bit above. The central bank, however, did not address this or change its usual phrasing on the possibility of future rate hikes.