Monday, November 23, 2009

Bank of Israel Raises Interest Rates Again

The Bank of Israel was the first to raise interest rates and is now the second (after the Reserve Bank of Australia) to raise it a second time.

Most analysts hadn't expected it, but given the relatively (compared to other countries) high Israeli growth rate and the increase in inflation the move is far from shocking. The Israeli economy will next year receive an additional boost from the Netanyahu governments planned personal and corporate income tax cuts.

With both inflation and growth accelerating and with short term interest rates still being only 1%, more interest rate increases from the Bank of Israel can be expected.