Economics
Rate Hikes Derailed by Shekel Could Mean Much Longer Pause Ahead
- Israeli central bank opted to keep key rate at 0.25% on Monday
- Faster economic growth hasn’t led to rapid growth in prices
Mixed denomination Shekel currency banknotes and tubes of coins
Photographer: Ariel Jerozolimski/Bloomberg
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The window of opportunity for the Bank of Israel to raise interest rates for the second time since 2011 is fast slipping away.
By leaving the key rate at 0.25% on Monday, the monetary committee extended its pause to almost six months as a rallying shekel keeps inflation too weak to increase borrowing costs. A deteriorating global outlook is creating yet another roadblock.