Monday, November 24, 2008

Update: Bank of Israel Cuts rates by 0.5%

The Bank of Israel(BOI) has surprised market players by lowering rates by 0.5% down to 2.5%. This is the lowest interest rate level ever in Israeli history. This means that you will pay less on overdrafts, and conceptually, get better loan terms at your bank. Whether the banks start granting loans is anyone's guess. On the other hand interest that you will receive on your bank deposits or on Israeli government bonds will drop.

The BOI must feel that with limited inflation risk, and the economy showing signs of zero growth, they need to do whatever it takes in order to jump start the economy. Now if the governement would only cut taxes!

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