Sun, 28 Feb 2021

JERUSALEM, Nov. 30 (Xinhua) -- Israel's central bank announced on Monday that it will keep the base interest rate for the next five weeks at 0.1 percent.

The decision was made against the background of the coronavirus crisis that affected the Israeli economy and negative inflation, which has fallen by 0.8 percent in the last 12 months, far below the government target of 1 to 3 percent.

According to the central bank, inflation expectations for the coming year, from all sources, remained below the lower bound of the target range.

The strengthening of the Israeli currency, the new shekel, against the U.S. dollar also contributed to keeping the basic interest rate at low.

Since the previous interest rate decision, the shekel has strengthened by about 1 percent in terms of the effective exchange rate, and by about 1.7 percent against the dollar in view of the significant weakening of the dollar worldwide.

The bank noted that the adverse impact of the coronavirus pandemic on the Israeli economy, particularly on the labor market, is expected to be prolonged.

The bank said that it will continue to utilize a range of tools to achieve the monetary policy goals and moderate the adverse economic impact resulting from the crisis.

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