Latest news with #OriHeffetz
Reuters
2 days ago
- Business
- Reuters
Bank of Israel MPC voted 5-0 to hold rates over inflation concerns
JERUSALEM, June 9 (Reuters) - All five members of the Bank of Israel's Monetary Policy Committee voted to keep the benchmark interest rate unchanged at 4.5% on May 26, according to minutes of the meeting issued by the central bank on Monday, citing worries over inflation. Due to Israel's war against Hamas militants in Gaza, the committee was focusing on stabilizing the markets and reducing uncertainty, alongside price stability and supporting economic activity, it said in a statement. Discussions centred on economic activity, which continued to recover moderately, it said, against a background of high domestic and global uncertainty. "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 Bank of Israel said. The central said that Ori Heffetz, who joined the MPC on May 25, decided not to participate in the voting. The committee will return to a full six members beginning with the July 7 policy meeting. A main concern for policymakers was a rise in the annual inflation rate to 3.6% in April, staying above its 1-3% target, although it acknowledged much of the gain was due to the impact of flights abroad. Still, MPC members expect inflation to take longer to move back within its target. "In the committee's assessment, there are 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, supply constraints, a deterioration in global terms of trade, and shekel volatility," the minutes said. The labour market, it added, remained tight but the most recent data showed some moderation. On May 27, Bank of Israel Governor Amir Yaron told Reuters that monetary policy needed to remain "cautious" given the uncertain geopolitical situation and near-term inflation environment, with policymakers ready to delay any rate cuts until inflation eased. "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.
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.
