Bank of Israel keeps rates on hold after April inflation rise
JERUSALEM, May 26 (Reuters) - The Bank of Israel left short-term interest rates unchanged for an 11th straight meeting on Monday after a surprising spike in April inflation, and as economic uncertainty persists due to the conflict between Israel and Palestinian Islamist group Hamas in Gaza.
The central bank left its benchmark rate (ILINR=ECI), opens new tab at 4.50%.
It reduced the rate by 25 basis points in January 2024 after inflation eased and economic growth slowed amid the Gaza war, but has kept policy steady since and said it is in no rush to ease again while inflation remains above target.
All 14 analysts polled by Reuters had expected no rate move on Monday.
With taxes and electricity and water prices rising at the start of this year and airfares increasing last month as foreign airlines cancel flights to Tel Aviv, the annual inflation rate (ILCPIY=ECI), opens new tab gained to 3.6% in April - above expectations of 3.1% - from 3.6% in March and remained above the government's 1-3% annual target.
The economy grew by an annualised 3.4% in the first quarter after a 1% expansion for all of 2024 due to the war.
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