Bank of Israel raises rates by largest amount since 2002
MPC says short-term inflation expectations have fallen, but warns of faster increases in house prices
The Bank of Israel’s monetary policy committee announced its largest policy rate rise in 20 years on August 22 as inflation continued to rise.
The six-member MPC voted to increase the policy rate by 75 basis points to 2%, its highest level since 2012. The hike was its fourth consecutive increase and the largest since 2002.
Year-on-year inflation rate rose for the fourth consecutive month in July to reach 5.2%, above the central bank’s target band of between 1% and 3%. The Bank of Israel’s
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