JERUSALEM, April 17 (Xinhua) -- Israeli central bank has decided to keep the lending rate for April and May at the historic low of 0.1 percent.
The decision was announced by Bank of Israel (BOI) on Monday, which cited the below-target inflation rate as the main reason. The extra-low rate in Israel has been unchanged since March 2015.
Over the past 12 months, the inflation in Israel climbed only 0.2 percent, well below the government's target of between 1-3 percent.
The Consumer Price Index (CPI) in Israel increased by 0.3 percent in March compared with the previous month, according to figures issued by Central Bureau of Statistics of Israel on Sunday.
In February and March, the CPI increased slightly higher than forecast, but most forecasts for one year remain below the target, while expectations for the medium and long terms are anchored within the target range, according to BOI.
As for the economy, BOI noted that it continues to grow at a solid pace, perhaps even higher than the potential growth rate.
Exports are increasing, driven by service exports. The labor market remains tight, and the downward trend in the unemployment rate continues. Wages have been increasing at a rate lower than the past, said the central bank.
As for the exchange rate, BOI said that it has not changed significantly since the last interest rate decision.
At the beginning of the period, the Israeli currency new shekel strengthened by about 2 percent in terms of the nominal effective exchange rate, and subsequently there was a depreciation by a similar rate.
With regard to the housing market, the number of transactions continue declining. In the past five months, home prices have decreased by 2.4 percent.