That is for the 2nd straight month. The central bank widened its rate corridor as another small step in efforts to "normalise" monetary policy
The Bank of Israel kept its key short-term lending rate at 2% for 2nd straight month. In a statement issued by the central bank it noted that uncertainty over global demand presents a risk to the Israeli economy.
In addition to holding key short-term lending rate at 2% for 2nd straight month the central bank widened its rate corridor as another small step in efforts to "normalise" monetary policy.
The central bank has already raised its key short-term lending rate by 150 basis points since August 2009 due to rapid economic growth and rising inflation pressures stemming from surging housing prices. The statement also noted that the central bank sees inflation moving above 3% rate in 1st half 2011.
Israel's economy grew an annualised 3.8% in the third quarter after 4.5% growth the prior three months. Inflation edged up to an annual rate of 2.5% in October from 2.4 % in September.