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Israel’s central bank first to tighten


So much for waiting for the jet lag to wear off.  Stanley Fischer, the Bank of Israel’s governor and listed as an attendee at this weekend’s Jackson Hole symposium in Wyoming, is first among central banker governors to push interest rates higher since July.

From Reuters:

The Bank of Israel said on Monday it increased its key short-term lending rate by a quarter-point to 0.75 percent to help inflation get back to its 1-3 percent target.

In doing so, it became the first major central bank to raise interest rates since the global financial crisis prompted a cycle of sharp monetary easing across the world, but analysts said other central banks were unlikely follow suit soon.

The rate increase, which was a mild surprise since most economists had believed the central bank would wait at least another month, was the first since July 2008 and came after the Bank of Israel had lowered its key rate by 3.75 points from last October to March.