Israel cbank: Economic growth "more firmly based"

JERUSALEM, March 28 (Reuters) - The Bank of Israel said on Sunday that it raised short-term borrowing costs for a fourth time since last August due to high inflation expectations and signs the economic recovery was becoming "more firmly based".

But the central bank said that despite its quarter-point increase in the key lending rate to 1.5 percent, monetary policy remained "expansionary".

It noted that inflation expectations for the next 12 months stand at 2.6 percent, near the upper limit of an official 1-3 percent annual target.

The bank said annual inflation, at a 3.6 percent rate in February, should fall below 3 percent next month. (Reporting by Steven Scheer, editing by Will Waterman)