Latest news with #AmirYaron
Yahoo
4 days ago
- Business
- Yahoo
Stanley Fischer, former Bank of Israel governor, passes away at 81
Fischer was praised for his transformative impact on Israel's economy and global monetary policy, especially during the global financial crisis of 2008. Stanley Fischer, former Governor of the Bank of Israel, passed away on Saturday at age 81. He held dual Israeli and American citizenship. Fischer served as Governor of the Bank of Israel from 2005 to 2013, and also served as Vice Chair of theFederal Reserve from 2014 to 2017, under the Obama administration. The Bank of Israel eulogized Fischer, writing, "Prof. Fischer made a decisive contributor to Israel's economy - both in his role as the IMF's representative to Israel in the 1980s, when he played a significant part in formulating the 1985 economic stabilization program, and during his tenure as Governor of the Bank, when he led a responsible economic policy during a challenging period that included the global financial crisis of 2008." Current Governor Prof Amir Yaron stated, 'The people of the Bank of Israel, past and present, and I bow our heads today in memory of Prof. Fischer, whose contribution to the Bank of Israel and the advancement of Israel's economy was decisive. We share in the family's deep sorrow. May his memory be a blessing.' Prof. Zvi Eckstein, head of the Aaron Institute for Economic Policy at Reichman University and former Deputy Governor of the Bank of Israel, commented on Fischer's passing, calling him a "visionary." 'Stanley Fischer was one of the greatest economists of our generation: a visionary, a guiding teacher, and an exemplary figure in public service. I had the privilege of working alongside him for about five years at the Bank of Israel." "I saw firsthand his tremendous contribution to shaping Israel's economy and to the historic legislation that enshrined the independence of the Bank of Israel. Beyond that, he was a brilliant scholar whose understanding of the dynamics of monetary policy and its impact through long-term contracts transformed economic thinking worldwide. May his memory be blessed, and may his contribution remain engraved in our hearts and our professional thinking," Eckstein wrote.
Reuters
27-05-2025
- Business
- Reuters
Six months more of war in Gaza to further weigh on growth, Israel central bank chief says
JERUSALEM, May 27 (Reuters) - Another six months of war between Israel and Palestinian militant group Hamas in Gaza would reduce Israel's economic growth by a half point in 2025 and further raise the debt burden, Bank of Israel Governor Amir Yaron said on Tuesday. A day after keeping interest rates unchanged again after a January 2024 cut, Yaron said monetary policy needs to remain "cautious" given the uncertain geopolitical situation and near-term inflation environment, with policymakers ready to delay any rate cuts until inflation eases. After a 1% pace of economic growth in 2024, the Bank of Israel projects 3.5% growth this year - assuming the war in Gaza winds down. But Israel has stepped up air strikes and ground forces have taken control of parts of Gaza, in its bid to eliminate Hamas and bring back remaining hostages held there. "The war, in terms of its effect on the economy, is particularly through the labour market right now," Yaron told Reuters on the sidelines of the Israel Democracy Institute annual economic conference, referring to citizens called up for military reserve duty, during which they would not be working. The central bank had assumed that the rate of reservists being called up would start declining in the second quarter. However, "right now, we are seeing the opposite," Yaron said. "If ... there is intensification of the war in Gaza for another six months that's already going to shave a half percent more in terms of growth in 2025," and raise the debt-to-GDP ratio to 71% from 69%. In the longer term, Yaron said he hoped the economy would revert to its long-term potential of annual growth of 4%. The Bank of Israel's economists also project the benchmark interest rate to fall to 4% from 4.5% by early 2026 on hopes for easing inflation. The inflation rate rose to 3.6% in April from 3.3% in March to stay above a target of 1-3%. Based on bond yields, financial markets still expect inflation to ease to 1.8% in the coming year. Yaron said he hoped supply - constrained by the war - and demand will come more into balance and push inflation down, but given the fluid situation, policymakers are putting less weight on near term inflation expectations. "If we don't see some of those (inflationary) corrections, it might take a little bit longer (to lower rates). And if it does take longer, we will stay restrictive for longer," he said. Should the recent appreciation of the shekel be sustained, that would help to ease inflation, he said.
Yahoo
26-05-2025
- Business
- Yahoo
Israel Set to Hold Rates as Inflation Spikes, Gaza War Escalates
(Bloomberg) -- NY Private School Pleads for Donors to Stay Open After Declaring Bankruptcy UAE's AI University Aims to Become Stanford of the Gulf NYC's War on Trash Gets a Glam Squad Pacific Coast Highway to Reopen Near Malibu After January Fires Israel's central bank is set to keep interest rates on hold for the 11th time in a row, amid increased military operations in Gaza and an uptick in inflation. The Bank of Israel will maintain its base rate at 4.5% on Monday, according to all analysts polled in a Bloomberg survey. The announcement will come against the backdrop of an acceleration in annual inflation. The rate rose to 3.6% last month from 3.3% in March. The April reading was the highest in eight months — barring January, when there was an hike in VAT — and pushes the figure further above the central bank's target inflation range of between 1% and 3%. Economic growth in the first quarter was slightly higher than expected at 3.4%, moderating the need for an imminent rate cut. Still, the pickup from the fourth quarter of 2024 was mostly attributable to a two-month ceasefire between Israel and Hamas over much of the measured period. That has since collapsed and Israel now says it stepping up attacks on Hamas to force the militant group to surrender and release hostages. Governor Amir Yaron previously signaled the central bank could start cutting rates in the second half of this year, provided inflation decelerated and market-risk premiums remained under control. Israel's five-year credit default swap spreads, a measure of bond traders' confidence in the country's debt, have fallen from 121 basis points to 103 basis points since April. But they remain well above the levels from before Hamas's Oct. 7, 2023 attack on Israel, which triggered the war in Gaza. 'The Bank of Israel will find it difficult to reduce the interest rate as long as inflation exceeds the target,' Bank Hapoalim's Financial Division said in a note to clients last week. 'It's reasonable to assume we'll be seeing a first cut only toward the end of the summer.' Hapoalim, Israel's second largest lender, recently raised its inflation forecast for 2025 to 3.2% from 3%. Rafael Gozlan, chief economist at IBI Investment House Ltd. in Tel Aviv, sees monetary policy remaining tight. 'Recent developments have significantly increased the probability of rate stability through the end of the year,' he said. On Sunday, Israeli media cited a military briefing in which officials said they would push to take over 75% of Gaza within two months, up from around 40% now. There are tens of thousands of reserve soldiers involved in Gaza operations, which is likely to impact an Israeli economy already grappling with labor and supply shortages. In addition, multiple airlines have stopped flying to Israel following an increase in missile attacks by the Yemen-based Houthis. Airfares were the main driver of last month's increase in the inflation rate. Costs are expected to remain high throughout the summer holiday season, though price levels overall were slightly moderated by a stronger shekel, helped by the dollar's weakness. Domestic tensions are also set to be a factor for the central bank. Prime Minister Benjamin Netanyahu appointed a new head of Shin Bet, Israel's domestic intelligence service, over the weekend, ignoring his attorney general's legal guidance. It's the latest example of the showdown between the prime minister and the country's institutions. 'There is positive correlation between the strength and independence of the institutions and economic growth,' Yaron said at a press conference earlier this year. 'If markets interpret that there is damage to that strength it will reflect in damage to the economy.' Why Apple Still Hasn't Cracked AI How Coach Handbags Became a Gen Z Status Symbol AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox Inside the First Stargate AI Data Center Anthropic Is Trying to Win the AI Race Without Losing Its Soul ©2025 Bloomberg L.P.
Reuters
25-05-2025
- Business
- Reuters
Bank of Israel MPC back to full strength after economist Heffetz approved
JERUSALEM, May 25 (Reuters) - Israel's cabinet approved the appointment of Ori Heffetz to the Bank of Israel's monetary policy committee, the central bank said on Sunday in a move that will bring the panel back to its full six members for the first time in two and a half years. Heffetz's tenure is effective immediately but he will not vote at Monday's interest rates decision since he was not present in all the rounds of discussions and monetary analysis in recent weeks. His first vote will be at the subsequent meeting on July 7. He specialises in macroeconomics and monetary policy, economic policy, and empirical, experimental and behavioural economics. Heffetz has served as an economics professor at the Hebrew University since 2022 as well as a professor at the School of Business Administration at Cornell University since 2024. Bank of Israel governor Amir Yaron said that Heffetz "has rich and relevant professional experience and I am sure he will contribute greatly to the work of the committee." By law, Israel's policy setting committee is meant to have six members - three from the Bank of Israel including the governor and deputy governor, and three from the public. In January 2023, Moshe Hazan, a Tel Aviv University economics professor, quit the MPC to fight the government's plan to overhaul the judiciary - which has since been shelved - and no one had been chosen to replace Hazan until Heffetz was nominated by a search committee earlier this year. Current voting members from the Bank of Israel include Yaron, his deputy Andrew Abir and research chief Adi Brender, along with non-central bank economists Naomi Feldman and Zvi Hercowitz. At the outset of Israel's war with Hamas, the central bank reduced its benchmark interest rate by 25 basis points in January 2023 to 4.5%, having sharply raised it previously to battle inflation. It has kept the rate unchanged since then due to inflationary pressures stemming from the now 19-month old conflict, including labour and supply constraints. Inflation rose to 3.6% in April, well above the government's 1-3% annual target rate. Economic growth has been weak due to the war - only 0.9% in 2024 but increasing to an annualised 3.4% in the first quarter of this year.
Reuters
10-03-2025
- Business
- Reuters
Bank of Israel stays cautiously optimistic on inflation, rates outlook
JERUSALEM, March 10 (Reuters) - Bank of Israel policymakers are cautiously optimistic that inflation will ease later in 2025 in the wake of uncertainty stemming from the effects of Israel's war against Palestinian militant group Hamas in Gaza. In minutes of the February 24 rates decision, all five members of the central bank's monetary policy committee voted to leave the benchmark interest rate (ILINR=ECI), opens new tab at 4.50% for a ninth straight meeting, minutes of the discussion showed on Monday. In leaving rates unchanged, the bank had cited an inflation rate rising to 3.8% in January from 3.2% in December, staying well above its 1-3% annual target range. The central bank blamed factors such as tax increases for the spike, and it estimates that inflation may move back below 3% in the second half of the year. However, the minutes also showed the committee's assessment that there were "several risks for a possible acceleration of inflation or for its not entering the target range — the geopolitical developments and their impacts on economic activity, prolonged supply constraints, shekel volatility, and fiscal developments". It added that the labour market remains tight, with a jobless rate at 2.8% in January, lower than its pre-war level, while the number of those temporarily absent from work due to military reserve duty continues to decline. Nominal wages have also grown 6.8% since September 2023. Still, Bank of Israel Governor Amir Yaron has said Israel could cut rates once or twice later this year should inflation move back into its target. "The interest rate path will be determined in accordance with the convergence of inflation to its target, continued stability in the financial markets, economic activity, and fiscal policy," the minutes said. Policymakers, it added, were focused on stabilising markets and reducing uncertainty in addition to maintaining price stability and supporting economic activity, even as the shekel has appreciated against the dollar and Israel's risk premium has fallen. Committee members also discussed economic ramifications of the war on the economy, which has been recovering at a moderate pace. Official data on Monday showed fourth-quarter economic growth (ILGD2=ECI), opens new tab was revised to a 2.0% annual rate from 2.5% in a preliminary estimate last month. For all of 2024, growth was revised down to 0.9% from 1.0%, although per capita GDP dipped 0.4% last year. The central bank forecasts 4% growth in 2025. The next rates decision is slated for April 7.
