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Israel central bank slashes rate to all-time low

Xinhua, February 23, 2015 Adjust font size:

Israel's central bank lowered on Monday its main interest rate to an all-time low to boost the country's sluggish economy.

In a first reduction in six months, the Bank of Israel cut the rate by 0.15 percentage points to 0.1 percent.

The Bank of Israel said the main reason for the cut was a low consumer price index, which fell by 0.9 percent last month amid a long-standing economic deflation.

The bank also cited renewed appreciation of the shekel, which grew stronger by 2.6 percent this month following a depreciation of 10.4 percent between August and December.

"Continued appreciation will likely weigh on growth in the tradable industries-export and import substitutes," the bank said.

At the same time, Israel's economy, which was hit hard by last summer's Gaza war, grew by 2.9 percent in 2014 and is expected to grow by 3.2 percent in 2015. Endit