Eight of eighteen analysts in a "Bloomberg" poll believe that the Bank of Israel will cut the interest rate for March by 25 basis points tomorrow to 1.5%. Ten analysts believe that the Bank of Israel will keep the interest rate unchanged. The Bank of Israel kept the interest rate for February unchanged at 1.75%, after cutting it for January.
Last week, the Bank of Israel announced new mortgage restrictions, ordering the banks to increase their provisions for mortgage loans. Many analysts believe that the measure was a preemptive step ahead of an interest rate cut, in the hope of preventing a further heating up of the housing market. "The measure is intended to prepare for an interest rate cut," says Discount Bank chief economist Nira Shamir. "Economic indicators point to the slowdown continuing, along with low inflation and a strong shekel, which support another interest rate cut."
The Bank of Israel has cut the interest rate to its current level from 3.25% in 2011.
Published by Globes [online], Israel business news - www.globes-online.com - on February 24, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
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