Low inflation to keep Israel rates accommodative , says central bank chief
Despite a spike in unemployment caused by three pandemic-induced lockdowns, Israel s annual inflation rate is projected to stabilize at around 1.6%; Israel s economy is bouncing back very fast says Bank of Israel governor
Reuters |
Published: 05.10.21 , 11:11
Israel s economy is recovering quickly from the COVID crisis but interest rate increases are some way off given inflation is expected to stay well contained, Bank of Israel Governor Amir Yaron said.
Yaron said policymakers have once again begun to focus on inflation after the consumer price index turned positive in March for the first time in a year at an annual rate of 0.2%.
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Palestinians hurled rocks, other heavy objects and firecrackers from the Al-Aqsa mosque compound, which is Islam’s third-holiest site and the location of Judaism’s biblical temple. Israeli police stormed the mount, firing stun grenades and rubber bullets. The Associated Press, citing Palestinian medics, reported that 50 Palestinians were hospitalized.
Spillover violence persisted from the Hamas-ruled Gaza Strip, where militants launched rockets and flaming balloons into southern Israel, setting fires but causing no injuries.
The potential for escalation is high because on Monday Israel celebrates Jerusalem Day, marking its capture of the city’s eastern sector from Jordan in the 1967 Middle East war. The day is traditionally a fraught one as a parade by Jewish nationalists cuts through the Muslim Quarter of the Old City, in a display of Israeli hegemony that Palestinians deplore.
UPDATE 1-Bank of Israel bought $5.27 bln of forex in April Reuters 3 hrs ago
JERUSALEM, May 6 (Reuters) - The Bank of Israel said on Thursday it had bought $5.27 billion worth of foreign currency in April, bringing its forex reserves to a record $193.99 billion.
The reserves, which equate to 48.1% of Israel s gross domestic product (GDP), grew by a total $8.3 billion last month, the central bank said, helped also by private sector transfers and a revaluation of the reserves.
In January, it said it would buy $30 billion of foreign currency in 2021 to try to stem the shekel s appreciation, after buying $21 billion in 2020.
Since then, Bank of Israel Governor Amir Yaron has said purchases could exceed $30 billion this year. It has bought about $19 billion of foreign currency in the first four months.
A month ago, 60% of Israelis were vaccinated, nearly double the corresponding vaccination rate of Americans at that time. Economic data suggest the benefits of a highly vaccinated population are playing out in real time.
“The Bank of Israel tracks credit-card expenditure as one of its special indicators on the state of the economy during the coronavirus crisis. Through Apr. 6, expenditure was running 19% ahead of January 2020 levels,” reports Steve Goldstein for Barron’s.
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