Israel hikes benchmark rate by 0.75 pct amid efforts to curb inflation

  • World
  • Tuesday, 04 Oct 2022

JERUSALEM, Oct. 3 (Xinhua) -- The Bank of Israel on Monday raised its benchmark rate by 0.75 percentage points from 2 percent to 2.75 percent.

The sharp rate hike comes as Israel is trying to control its annual inflation, which fell to 4.6 percent in August from 5.2 percent in July, still well above the government target range of 1-3 percent.

This is the fifth rate hike made by Israel's central bank since mid-April when the rate was as low as 0.1 percent, and the second consecutive 0.75-percent aggressive one after it did so in late August.

The current basic rate is also the highest recorded in Israel since January 2012 when it was also 2.75 percent, according to the bank's data.

Meanwhile, home prices in Israel increased by 17.9 percent in the past 12 months, significantly higher than the pace of recent years, the bank noted.

The Israeli economy is recording strong activity, accompanied by a tight labor market and an inflationary environment, allowing continued rate increase, the central bank concluded.

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Xinhua Middle East news summary at 2200 GMT, Dec. 7

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