BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Sunday, 9 June, 2002, 15:59 GMT 16:59 UK
Israel interest rates rise sharply
Bank of Israel
Israel's currency has fallen sharply this year
In a surprise move to curb inflation, Israel's central bank has raised its key interest rate by 1.5 percentage points to 7.1%.


In recent months there has been a rise in the trend of inflation expectations for the next 12 months

Bank of Israel
The rise will officially come into effect on Tuesday, the Bank of Israel said following the unscheduled announcement.

"Raising interest rates in the short term aims at restoring inflation to the realm of price stability and strengthening financial stability," the central bank said.

"In recent months there has been a rise in the trend of inflation expectations for the next 12 months.

"For some time this has deviated from the upper limit of price stability [at 3%] and has even reached 5% recently."

Weak currency

The central bank recently raised rates by 1 percentage point to halt the country's currency, the shekel's fall against the US dollar.

The move failed to work as intended and the shekel fell to 4.99 to the dollar on Friday, its lowest level yet and about 14% down on December 2001 when the bank slashed 2 percentage points off the rate.

The pressure on the shekel has been a result of investors fleeing Israel due to a harsh recession, rising government spending and the extensive violence in the region.

The latest rate hike reversed the exchange rate, with the shekel bouncing back to 4.93 to the dollar.


Key stories

Profiles

FACTFILE

TALKING POINT

AUDIO VIDEO
See also:

09 Jun 02 | Middle East
07 Jun 02 | Middle East
06 Jun 02 | Middle East
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes