Goldman Sachs believes that the next major policy change by Bank of Israel will be to stop its dollar purchasing program, which it expects to happen within a few months. Yesterday, the Bank of Israel left the August interest rate unchanged at 0.5%, and announced that it will halt its program of buying government bonds next week.
Goldman Sachs says that it was surprised by the Bank of Israel's actions. It had expected the Bank of Israel to stop its dollar purchasing program first, before stopping its purchases of government bonds.
Goldman Sachs says that its main point is intact, and that the Bank of Israel plans to gradually retreat from the radical monetary measures taken, in line with general improvement in financial and economic conditions in Israel and the world.
Published by Globes [online], Israel business news - www.globes-online.com - on July 28, 2009
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