The last rate hold decision was unanimous, despite concern regarding shekel depreciation

ISRAEL - In Brief 19 Sep 2023 by Jonathan Katz
The last rate hold decision was unanimous but shekel depreciation is worrisome for the MPC. In the protocol of the decision: “the depreciation of the shekel continues to be a significant factor delaying the convergence of the inflation rate back to the target, the shekel depreciation in recent months contributes to the increase in the inflation rate and its development in the coming months will have an impact on the inflation dynamic.” There is still a clear tightening bias. The committee “sees a real possibility of having to raise the interest rate in future decisions, if the inflation environment does not continue to moderate as expected.” The direction of the shekel and September's CPI will impact the next rate decision. Without a clear trend reversal to shekel appreciation, we expect a rate hike on Oct 23rd.

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