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(CEP News) - In an unscheduled and surprise move, the Bank of Israel slashed its benchmark interest rate by 50 bps to 3.75% "in light of the sharp increase in uncertainty in financial markets around the world and its implication for Israel's financial markets," the bank said.
The new rate is effective October 12. The central bank said inflation pressures are expected to continue falling on the back of declining commodity prices and prospects for slower economic growth in the region. "Inflation expectations and Israeli forecasters' inflation predictions for the next twelve months are now within the target range," said the central bank in a press release. The bank also pointed to the global economic slowdown occurring and rising pressures in the financial marketplace. Nevertheless, the central bank was adamant that the move remains consistent with supporting economic growth and balancing inflation expectations. By Erik Kevin Franco,
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, edited by Sarah Sussman,
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