Bank of Israel Raises Interest Rate to 4.75%; Highest Since 2006

View of the Bank of Israel main offices in Yerushalayim. (Yonatan Sindel/Flash90)

YERUSHALAYIM (Reuters) – The Bank of Israel raised its benchmark interest rate by another quarter of a percentage point on Monday, in what may be the last move in a more than year-long battle against persistent inflation.

The central bank lifted its key rate to 4.75% – its highest level since late 2006 – from 4.5%. It was the 10th straight time it has raised rates in an aggressive tightening cycle that has taken the rate from 0.1% last April.

Despite the rate hikes, Israel’s inflation rate stood at 5% in April, near a 14-year high and well above the government’s 1%-3% annual target range.

At the same time, Israel’s economy grew a faster than expected 2.5% annualized rate in the first quarter from the prior three months.

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