In its continuing effort to regulate Israel’s inflated economy, the Bank of Israel’s Monetary Committee is meeting today in order to decide whether it will raise Israel’s interest rate, which currently stands at 4.75%.
Doing so would mark the eleventh consecutive raise, and even a minor .25% raise will bring the interest rate up to levels not seen in Israel since 2006.
There is uncertainty as to whether the bank will indeed decide to continue raising the interest rate, as private consumption has begun to moderate and the annual rate of inflation has taken a long-awaited downturn, having last been measured at 4.6%, a marked decrease from April’s 5%.
These factors could be a sign that the bank’s repeated decision to hike its key rate is actually paying off — experts have repeatedly criticized the Bank of Israel for seeming to exclusively resort to interest rate increases as a catch-all solution for the country’s struggle with inflation.
Could the Bank of Israel decide against raising the interest rate?
If the committee determines the current interest rate to be effective enough in relation to consumer consumption and inflation, it may decide not to raise it and allow the economy to continue regulating at its current pace.
