JERUSALEM, Oct. 7 (Xinhua) -- Israel's central bank announced Monday that it will keep the base interest rate for the next seven weeks at the rate of 0.25 percent.
The Bank of Israel estimated that in view of the state's inflation environment, the monetary policies of major central banks, the slowing of the global economy, and the continued appreciation of Israel's new shekel, it will be necessary to leave the interest rate at its current level for a prolonged period, or to reduce it.
This is in order to support a process at the end of which inflation will stabilize around the midpoint of the governmental target range (1 to 3 percent), so that the economy will continue to grow strongly.
Israel's inflation environment remained low, as inflation in the past 12 months stood at 0.6 percent.
The Israeli annual inflation has been below the target range for three months, after about one-year period in which the inflation was around 1 percent annual.
Since the previous interest rate decision on August 28, the Israeli new shekel has strengthened by 1.2 percent in terms of the nominal effective exchange rate (geometric average vis-a-vis 26 currencies), and by 9.1 percent since the beginning of 2019.
This appreciation is making it more difficult to return inflation to the target range.
The bank announced that, if necessary, it would take additional steps to make monetary policy even more accommodative.
The bank added it continues "to monitor developments in inflation, the real economy, fiscal policy, the financial markets, and the global economy, and will act to maintain monetary policy targets in accordance with such developments."