"The Bank of Israel looks at the economy as a whole, including housing. We manage a macroeconomic policy that affects everyone. A person who takes a 20-year mortgage should set the interest rate," Bank of Israel Deputy Governor Zvi Eckstein told “IDF Radio" (Galei Zahal) today, the day after the Bank of Israel raised the interest rate by 50 basis points to 3%.
Eckstein added, "The moment you take a risk when the interest rate is very low, you should be aware of the risk, especially since the Bank of Israel has consistently said for the last 18 months that the low interest rate is temporary so the economy can recover."
"IDF Radio": Will the prime rate rise by 1% within a year?
Eckstein: "The governor of the Bank of Israel did not say that yesterday, but according to a study by the Bank of Israel's Research Department, we expect that the policy needed now will require more interest rate hikes."
Will the Bank of Israel buy dollars today to support the shekel-dollar exchange rate?
"Part of the Bank of Israel's monetary policy is to support employment, and part of that is linked to the exchange rate. The Bank of Israel monitors exchange rates, and when there is a deviation, it intervenes."
Published by Globes [online], Israel business news - www.globes-online.com - on March 29, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011