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Israel increases key rate to highest level since 2008

02 January 2023 19:30 (UTC +04:00)

The Bank of Israel raised its benchmark interest rate to 3.75% on Monday, pushing it to its highest level since the 2008 financial crisis in response to soaring inflation, APA reports citing Teletrader.

The move comes after the Israeli central bank introduced a rate hike of more than 300 basis points throughout the past year in an effort to curb price increases.

In the same period, the Israeli shekel plunged nearly 13% against the United States dollar, marking the worst period since 1998. Commenting on the tightening policy, Deputy Governor Andrew Abir previously said markets could expect the rate to go above 3.5% and stay there for the majority of 2023. Other estimates have put the rate between 3.5% and 4% this year.

Meanwhile, Prime Minister Benjamin Netanyahu returned to office after only 18 months in opposition after reaching a coalition with right-wing parties. His agenda mainly focused on political matters related to the West Bank and relations between religion and the state.