Banks to Cut Interest Rates by 0.5%

The Bank of Israel cut interest rates by half a percent Monday, in response to positive results in its anti-inflation policy.

The new interest rate, scheduled to go into effect Thursday, will be 13.5 percent.

Following the Bank of Israel’s lead, major banks announced that they, too, would cut commercial lending rates by half a percent.

The consumer index rose by 0.9 percent in April, the lowest for the month in more than 20 years. Inflation for the first four months of 1995 stood at a cumulative 1.2 percent.

The Bank of Israel has cut interest by 3.5 percent since March. It said it expected annual inflation to stay in the single digits.

Industrialists and Histadrut leaders criticized the cut, calling it too cautious to have any effect. They called for a reduction of at least I percent in the interest rates.

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