The Bank of Israel announced on Monday that it is leaving the rate it charges commercial banks at a tenth of a percent. In a statement accompanying the decision, the bank said, "The annual inflation rate and 1-year inflation expectations increased but remain below the target range." It noted, "The increase in nominal wages and strong economic activity will contribute to an increase in the inflation rate, while the appreciation that has occurred in the shekel, the increased competition in the economy and measures adopted by the government are expected to delay the return of inflation to the target range."
Commenting on external factors, the bank noted, "Global activity and world trade continue to improve gradually, and according to forecasts, the improvement is expected to continue. The political risk in Europe declined significantly. The interest rate in the US is expected to be increased in June, while in Europe and Japan the accommodative policy continues."