BOI-The Monetary Committee decides on January 3, 2022 to keep the interest rate unchanged at 0.1 percent.

ENPNewswire-January 4, 2022--BOI-The Monetary Committee decides on January 3, 2022 to keep the interest rate unchanged at 0.1 percent

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Release date- 03012022 - Economic activity continues apace, and labor market data for November and the first half of December indicate an improvement in the employment indices.

However, the increase in the morbidity rate and in the infection coefficient due to the 'Omicron' variant, increase the risk to activity and may have macroeconomic significance in accordance with their scope. These developments are leading to an increase in uncertainty regarding the intensity of economic activity in the short and medium term.

Inflation in Israel stabilized around the midpoint of the target range. The CPI for November declined by 0.1 percent. Inflation in the past 12 months was 2.4 percent. Inflation expectations for the coming year and for the medium and long terms are within the target range.

Since the previous interest rate decision, there has been increased volatility in the exchange rate. At the end of the period, the shekel had weakened by 0.7 percent against the US dollar, by 1 percent against the euro, and by 0.2 percent in terms of the nominal effective exchange rate.

Economic activity continues apace. Labor market data for November and the first half of December indicate a marked improvement in the employment indices.

The Research Department revised its macroeconomic staff forecast. Its assessment is that GDP will grow by 5.5 percent in 2022, and by 5 percent in 2023.

Home prices increased by 10.3 percent in the past 12 months, a significantly higher rate than in recent years.

The global economy continued its trend of recovery during the reviewed period, but there was an increase in uncertainty in view of the spread of the 'Omicron' variant, which may cause difficulties in the production and supply chains. In most countries, the inflation indices have increased to levels higher than their central bank targets, and monetary tightening around the world continues.

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The Israeli economy's process of recovery from the crisis continues. However, there are still challenges to economic activity. The Committee will therefore continue to conduct an accommodative monetary policy for a prolonged time, in accordance with the pace of growth, employment, and the path of inflation. This is in order to continue supporting the attainment of the policy targets and the economic...

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