Bank of Israel Governor Jacob Frenkel announced Wednesday the lowering of prime lending rates by 0.7 percent, to 16.3 percent. The move comes after months of anticipation and after relatively low increases in the rate of inflation.
Some economic leaders called the move “too, little, too late.”
But Frenkel stood by the decision, saying it was the right one.
“The consistent policy of the Bank of Israel is now bearing fruit and reduction of interest rates is warranted,” he told Israel Television. “On the other hand, inflation is still too high. We are still running at an inflation rate that exceeds the target and therefore, we cannot lower interest rates by more.
Shares on the stock exchange did not respond immediately to the move.