• March 1, 2024

Israel’s cenbank director expects additional rate rises, criticizing judicial changes 2023

Governor Amir Yaron of the Bank of Israel stated that there is a good chance that interest rates would continue to rise since inflation is still too high. He also urged the Israeli government to ensure that the country’s judicial system retains its autonomy.

Yaron stated in an interview with CNN that “we are seeing stickiness of inflation” in both Israel and abroad, with special emphasis on the service sector.

Yaron said, in reference to the government’s yearly target range of 1-3%: “Thus, we are resolute and utterly resolved to bring inflation back down to its objective.” “And if that means continuing to raise rates, and if that is our primary instrument, then that is what we will do,” the statement said.

In January, Israel’s annual inflation rate hit a new high of 5.4%, surpassing the previous peak from 2008. Data for February is scheduled to be released later on Wednesday, and analysts surveyed by Reuters anticipate a rate of 5.0 percent when they look at the data.

During the course of the past year, the Bank of Israel has increased its benchmark interest rate (ILINR=ECI) from 0.1% to 4.25%, with the goal of bringing inflation under control.

Yaron also voiced his opposition to the plans that the Israeli government has in place to revamp the judicial system, arguing that the current strategy may compromise the autonomy of the courts. According to what he had said, “the process itself is hurried, and there is not a wide consensus among the public.”

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