Meitav chief economist Ron Eichel expects the Bank of Israel to raise the interest rate for April by 25 basis points to 2.75%.
Meitav Investment House Ltd. chief economist and strategist Ron Eichel sees the Bank of Israel raising the interest rate next week by 25 basis points for the second consecutive month to 2.75%. However, Eichel insists that there is zero chance the Bank of Israel will raise the interest rate for April by more than 25 basis points, in particular because of the catastrophe in Japan and the consequent volatility of global markets.
Eichel predicts the interest rate hike because of the surprisingly high 0.3% rise in the Consumer Price Index for February, which was published last week. Eichel explained that the unexpected rise was mainly due to food commodity price rises such as increases of 6.6%, 6.3%, and 6.2% in the prices of sugar, coffee and noodles respectively. The price of cocoa soared by 11.9%.
Looking ahead, Eichel predicts that the CPI will rise 0.4% in March and by 3.5% in 2011.
Published by Globes, Israel business news - www.globes-online.com - on March 20, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011