The Bank of Israel has raised the interest rate Monday in a surprise move for the first time since 2011, when Stanley Fischer was head of the central bank.
The Bank raised the interest rate from 0.1 percent to 0.25 percent as inflation remained within its target of one to three percent.
In deciding to raise short-term rates, the Bank noted inflation that is stabilising within the target range, while the economy was growing at a solid pace.
“Even after an increase of the interest rate by 0.15 percentage points, monetary policy remains accommodative and will continue to support the attainment of policy targets,” the central bank said in a statement. “The committee assesses that the rising path of the interest rate in the future will be gradual and cautious.”
At present, Deputy Bank of Israel Governor Nadine Baudot-Trajtenberg is acting head of the Bank of Israel.
“The committee was very aware that we are in a transition period, a period of changing governors … but like in all previous decisions, the committee members believed decisions must be made based solely on data and economic analyses,” she said.
Bank chief Karnit Flug completed her five-year term this month, and incoming Bank Governor Amir Yaron doesn’t begin his term until he is sworn in next month.