JERUSALEM, Jan 19 (Reuters) – All four members of the Bank of Israel’s Monetary Policy Committee voted to cut the benchmark short-term interest rate by a quarter point to 4% on January 5, according to minutes of the meeting issued by the central bank on Monday.
The rate cut was a surprise and the second in a row after lowering the benchmark rate in November for the first time in nearly two years. The central bank cited an improving inflation environment after the Gaza ceasefire in October for the rate decision two weeks ago. A four-year peak in the shekel against the dollar was also a factor.
Bank of Israel Governor Amir Yaron said at the time that despite the two cuts in a row, policymakers would remain cautious and mindful of economic and inflation developments and that the MPC’s base scenario was for the key rate to fall to 3.5% this year – two more 25 basis-point reductions.
The MPC typically has six members but the terms of two of them, appointed by the government, had expired since the rate decision in September and they have yet to be replaced.
(Reporting by Steven Scheer; Editing by Emelia Sithole-Matarise)
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