Israel central bank cuts rates as inflation stays low
(AFP, JERUSALEM) - Israel's central bank announced Monday it was cutting interest rates by 0.2 percentage points to 9.1 percent as the country continues to enjoy relatively low levels of inflation.
The reduction, which takes effect in August, is the first since May and takes rates to their lowest level since November 1993 after a steady decline since late 1998.
Israel's consumer price index rose only 0.3 percent in June and the inflation rate for the year 2000 is forecast by economists to come in below the government's projection of three to four percent.
However, the Bank of Israel said in a statement that price stability was still at risk from political uncertainty and various private parliamentary bills which it said, if passed, could increase the budget deficit.
The rate of growth in the country is expected to reach four percent for the year, about double the previous year, the Bank of Israel says, up from earlier government estimates.
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)