Bank governor Amir Yaron said he hoped the cycle of rate hikes, which began a year ago, was coming to an end.
He also urged the government to reach a broad consensus regarding a planned overhaul of Israel’s judiciary, a highly-contested move that he said has already impacted the economy.
The central bank lifted its key rate to 4.5% – its highest level since 2007 – from 4.25%, in line with a Reuters poll of economists. Last April policymakers began raising the rate from 0.1% and have been aggressive during a front-loading process that analysts believe is close to over.
“Economic activity in Israel is at a high level, and is accompanied by a tight labour market, although there is some moderation in a number of indicators,” the bank said in its decision.
Policymakers remained determined to bring inflation back within the government’s 1%-3% annual target range, Yaron said. The annual inflation rate stood at 5.2% in February, slightly lower than…
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