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November 30, 2020 10:08 am

Bank of Israel Leaves Benchmark Rate Unchanged at 0.1%

avatar by Reuters and Algemeiner Staff

An Israeli flag flutters outside the Bank of Israel building, in Jerusalem, Aug. 7, 2013. Photo: Reuters / Ronen Zvulun / File.

The Bank of Israel held its benchmark interest rate at 0.1% for a fifth straight meeting on Monday, preferring to keep it above zero while using bond purchases and other measures to support an economic recovery from the coronavirus pandemic.

Fifteen of 16 economists polled by Reuters had believed the monetary policy committee would keep rates steady at its final meeting of 2020 after holding pat in May, July, August and October following a reduction from 0.25% in early April.

Despite an economy set to shrink this year and with unemployment rising amid a second lockdown to contain the COVID-19 virus, central bank officials have expressed reluctance to lower the key rate from an all-time low to zero or into negative territory, preferring instead to use measures such as buying currency and government and corporate bonds.

With most of the economy open during the summer after the first lockdown, growth spiked to an annualized 37.9% in the third quarter, according to preliminary data, after a 29.8% contraction in the previous three months.

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