Flash: BOI Cuts Rates to Lowest in Israeli History

Written by: Aaron Katsman | November 24, 2008

The Bank of Israel surprised analysts by cutting interest rates a full 50 basis points to 2.5% This is the lowest level rates have ever been in Israeli history. Clearly this is a signal that the BOI is expecting much slower economic growth moving forward. Coupled with non-existent inflation it appears that the BOI felt that a bigger rate cut than was expected was justified to hep jump-start the economy.

As a result the Shekel looks to be weakening slightly and look for a move up in Israeli bonds tomorrow.

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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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2 Comments »

Pingback by Are Fischer Rumors Indicative of a Major Israeli Economic Crisis | Israel Opportunity Investor on December 2, 2008

[...] question is whether if this is so, does this mean the Israeli economy is about to go into the gutter. Fischer has a history of bailing out just in the nick of time, [...]

Pingback by How the Global Economic Crisis is Affecting the Job Market in Israel Early On | JobMob on December 8, 2008

[...] The Israeli government and Bank of Israel (BoI) initially hoped to not get involved in fixing the economy but as the situation has worsened, both have begun to intervene with the former preparing an economic aid package and the latter dropping interest rates to their lowest level in Israeli history. [...]

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