Bank of Israel cuts key rates

JERUSALEM - Agence France-Presse

Israel’s Central Bank is to reduce its benchmark interest rate for January by a quarter of a percentage point to 1.75 percent, it said in a statement yesterday.

 “The decision to reduce the interest rate for January 2013 by 0.25 percentage points, to 1.75 percent, is consistent with the Bank of Israel’s interest rate policy, which is intended to entrench the inflation rate within the price stability target of 1.0-3.0 percent a year over the next twelve months,” the bank said.

 “Against the background of the need to provide additional support for economic activity and the absence of inflationary pressures at this time, the Monetary Committee decided to reduce the interest rate by 0.25 percentage points.” The bank cited a range of factors for its decision, including “continued decline in the inflation environment,” weak growth and the shekel’s comparative strength, and the elevated level of risk from the world economy.