The US investment bank pours cold water on forecasts that the Bank of Israel will raise interest rates next year.
US investment bank Goldman Sachs does not see the Bank of Israel raising interest rates before 2023, according to a survey seen by “Globes.” Goldman Sachs does not see a rate hike next year because, “We think that there is still room for recovery in the job market, inflation is expected to fall next year and the extent of the strengthening of the shekel is expected to be limited.” On Thursday the Bank of Israel’s Research Department said that the interest rate over the next year would range between the current historic low of 0.1% and 0.25%.
RELATED ARTICLES
Bank of Israel keeps rate unchanged, no inflation concerns
Israel’s derivatives market was stormy last week due to activities by foreign funds, which lumped Israel in one block with Poland which unexpectedly raised interest rates. Goldman Sachs analysts were among the very few who foresaw Poland raising interest rates. The US investment bank is now pouring cold water on the scenario of a rate hike in Israel.
The Bank of Israel Monetary Committee kept the rate unchanged at 0.1% but Governor Amir Yaron signals the end of the bond buying program in November-December if nothing extreme happens before then.
Goldman Sachs wrote, “We don’t consider it a big surprise because the size of monthly bond purchases has already fallen. Similarly to the previous meeting the Monetary Committee stated that it would conduct an expansionist policy (in the past very expansionist) for a continued period of time but stopped relating to use of “a range of tools” (including interest rates).”
The Bank of Israel was optimistic in its forecast regarding growth due to the fall in the Covid infection rate in Israel and said that there were no concerns about a spike in inflation. Yaron said that inflation in Israel is lower than in other countries and within the Bank of Israel’s annual range of 1%-3%.
Published by Globes, Israel business news – en.globes.co.il – on October 10, 2021
Copyright of Globes Publisher Itonut (1983) Ltd. 2021
Amir Yaron Photo: Yonatan Bloom
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsBit.us is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
