Bank of Israel keeps benchmark interest rate at 1.0 pct
JERUSALEM Dec 23 (Reuters) - The Bank of Israel held its benchmark interest rate at 1.0 percent for a third straight month on Monday after signs the economy is strengthening.
Firmer economic data and the U.S. Federal Reserve's decision to start paring its bond-buying programme have reduced pressure on the central bank to lower rates even though the shekel is still hovering at a more than two-year high versus the dollar.
A slight rise in the annual inflation rate to 1.9 percent in November has also given policymakers less room to ease monetary policy although inflation remains within the government's 1-3 percent target.
The Bank of Israel cut its key rate in September after the shekel appreciated and the export-dependent economy slowed. Since the last rates decision a month ago, the Israeli currency has appreciated to 3.50 per dollar from 3.56.
Israel's economy grew in the third quarter at an annualised pace of 2.2 percent, which new central bank Governor Karnit Flug described as "disappointing". However, minutes of the Nov. 25 policy meeting noted initial fourth-quarter data pointing to a recovery in goods exports. (Reporting by Steven Scheer; Editing by Ruth Pitchford)
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