Bank of Israel Governor: Rate will exceed our forecast

Published date22 November 2022
Publication titleGlobes (Rishon LeZion, Israel)
Most analysts see the Bank of Israel Monetary Committee hiking the rate by 0.25% in each of its meetings in January and February 2023 to 3.75%

Prof. Yaron explained the reasoning behind the Monetary Committee's latest hike. "We raised it by 0.5% and not 0.75% because we know that the interest rate takes time to have an effect. This is a process and so we are undertaking it with the right size measures."

He stressed that further hikes can be expected in the coming months. "This is most likely not the end of the process, the danger of inflation has not abated. At the same time, the economy is strong and employment is strong. We will probably exceed the research division's forecast of an interest level of 3.5%. We expect the interest rate to continue to climb."

Prof. Yaron added, more optimistically, "We do see inflation moderating in the first quarter of 2023 and stabilizing towards the summer."

On the sharp rise in mortgage payments, which are hitting Israelis hard, Prof. Yaron said, "I...

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