The Deputy Governor of the Bank of Israel:
| Tal Caspin, Devar News
“We may have to raise the interest rate beyond 4%, if inflation continues to rise beyond what was expected and demand does not decrease” – this is what Deputy Governor of the Bank of Israel, Andrew Abir, said on Monday at the annual financial conference of the CPA Office.
Abir referred to the policy of the Bank of Israel, which raised the rate from 0.1% to 3.75% in seven consecutive decisions, the most significant round of interest rate increases in recent decades. According to the deputy governor’s method, an additional increase in interest rates may be required, in order to slow down the economy and harm the public’s demand for consumer products in order to stop the , which reached 5.3% per year.
at the annual financial conference of the Chamber of Accountants, and referred to the Bank of Israel’s forecast for the economy for the next two years:
“We expect that in the coming year there will be a certain slowdown in economic activity, but not that we will enter a recession. Our expectation and forecast are based on the assumption that the interest rate will rise to around 4 percent. But we may have to raise the interest rate even beyond 4 percent if inflation continues to rise, and demand does not decrease.” .
The Deputy Governor of the Bank of Israel added:
“The increase in inflation is not only a result of problems in the production chain and the rise in commodity prices. It is also a result of strong demand in an economy that recovered quickly from the corona lockdowns. When we left the corona period, the countries gave a lot of money to citizens. Some people had more money in their bank accounts after the corona than before , and the demands were very high and are still high.”
The Deputy Governor referred to the fact that the banks were late in adjusting the interest rate on the deposits, but in addition to the criticism towards the banks, he pointed out that the public should be informed that there are other options besides the banks, and also that there should be negotiations with the banks on the amount of the deposits and to take advantage of the tools that the Bank of Israel has promoted for the benefit of the customers on this issue .
Read the full article on the Devar news site