The Bank of Israel left its benchmark interest rate unchanged after reducing it twice in three months, saying the economy was expanding and policy makers want to retain their ability to react to future developments.
The monetary policy committee, led by Governor Stanley Fischer, held the rate at 2.75 percent, the Jerusalem-based central bank said on its website today. Eight of 20 economists surveyed by Bloomberg forecast the decision, while 12 predicted a quarter-point decrease.
“Fischer prefers not to use up his ammunition too quickly,” said Yair Drori, chief analyst at Tachlit-Discount Portfolio Management Ltd. “Fischer is likely to lower the interest rate two or three times in the coming six months in line with economic developments in Israel and abroad.”
The central bank said in today’s decision that it was reducing its Israel growth forecast for next year to 2.8 percent from a September prediction of 3.2 percent, citing the European debt crisis. Fischer said Dec. 7 that the bank was likely to lower its forecast to “around” the Organization for Economic Cooperation and Development’s 2.9 percent prediction.
“Indicators of economic activity in Israel continue to support the assessment that the economy is still expanding, although more slowly than at the beginning of the year and during last year,” the central bank said today. The current rate “leaves the bank room to react to developments,” it said.
Consumer prices rose 2.6 percent in November from a year earlier, the lowest increase in a year, Israel’s Central Bureau of Statistics said Dec. 15.
The shekel strengthened to 3.7724 a dollar at 5:46 p.m. in Tel Aviv from 3.7770 just before the decision.
Two-year interest-rate swaps, an indicator of investor expectations for rates over the period, were unchanged at 2.47.
Economists’ 12-month inflation expectations declined to 2.2 percent from 2.3 percent a month earlier, the central bank reported Dec. 19. The government’s target range for inflation is 1 percent to 3 percent.
The central bank last cut its benchmark lending rate in November, lowering it by a quarter point. While Israel passed through the 2008-2009 crisis in “reasonable shape,” the economy is now being affected by the worsening global outlook and the Bank of Israel was justified in switching to a loosening monetary stance, the OECD said Dec. 12.
“The economic indicators are demonstrating quite strong growth,” Ron Eichel, chief economist at Meitav Mutual Fund Management in Tel Aviv, said prior to the decision. “It’s not a recession mode and the interest rate is quite low. The Bank of Israel is already in a very accommodative stance.”
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Prime Minister Benjamin Netanyahu said during a Hanukkah ceremony at the Knesset that the fact that the unemployment rate has dropped to 5% in October is akin to a the legendary Hanukkah miracle: “The miracle of the oil can was a budgetary one. A limited budget was available, and it was used in the best possible way to answer the people’s needs. We will also have to find solutions of this sort.
“This is the lowest rate that we have seen in decades and one of the lowest in the Western world,” he noted. (Attila Somfalvi)
Israeli archaeologists have uncovered the first archeological find to confirm written testimony of the ritual practices at the Jewish Temple in Jerusalem.
An Israeli Antiquities Authority archaeological survey at the northwestern corner of the Temple Mount yielded a tiny tin artifact, the size of a button, inscribed with the Aramaic words: “Daka Le’Ya,” which the excavation directors on behalf of the IAA, archaeologists Eli Shukron and Professor Ronny Reich of the University of Haifa, explain means “pure for God.”
Researchers believe the artifact, dated to the first century, towards the end of the Second Temple period, is a seal similar to those described in the Mishnah. If they are correct, this is the first time physical evidence of the temple ritual was found to corroborate the written record.
The team believes the tiny seal was put on objects designated to be used in the temple, and thus had to be ceremonially pure.
In this vein, and in the spirit of Hanukkah, Jerusalem District archaeologist of the Israel Antiquities Authority, said: “It is written in the Talmud that the only cruse of oil that was discovered in the Temple after the victory of the Maccabees over the Greeks, “lay with the seal of the High Priest” – that is: the seal indicated that the oil is pure and can be used in the Temple. Remember, this cruse of oil was the basis for the miracle of Hanukkah that managed to keep the menorah lit for eight days”.
In addition to this artifact, the dig also yielded other Second Temple artifacts, some older from the time of the Hasmonean Dynasty rule, including oil lamps, earthenware pots, and containers filled with oils and perfumes, as well as coins bearing Hasmonean kings such as Alexander Jannaeus and John Hyrcanus