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Bank of Israel cuts benchmark lending rate 25 bps to 1.75 pct
December 24, 2012 / 3:40 PM / 5 years ago

Bank of Israel cuts benchmark lending rate 25 bps to 1.75 pct

JERUSALEM, Dec 24 (Reuters) - The Bank of Israel lowered its benchmark interest rate to 1.75 percent on Monday, the second quarter point cut in three months, taking advantage of a very low inflation environment to aid Israel’s slowing economy.

Analysts had thought the decision could go either way, with the 14 economists polled by Reuters evenly split as to the outcome.

The central bank had reduced its key rate in late October for the time since June in a move aimed at supporting the economy while inflation was tame.

Inflation eased to a 1.4 percent annual rate in November to remain well within a government target of 1-3 percent. The economy is expected to have grown about 3.5 percent this year but slip to a pace of about 3 percent in 2013, although much depends on economic growth in Europe, the United States and Asia.

Some economists expect one more rate reduction early next year.

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