“We think the Bank of Israel has emerged from the crisis as one of the most credible central banks Central and Eastern Europe, the Middle East, and Africa”, said Citibank analyst David Lubin this July. Lubin also predicts that
Israel’s interest rate will reach 2.25% by the end of 2010, after two more rate hikes.
The Bank of Israel was first in the western world to raise interest rate over a year ago, in the midst of the economic crisis, thus signaling that Israeli recovery was already underway. Israel received at that time many compliments for it’s monetary policy from Dr. Nouriel Roubini , Merrill Lynch, The Wall Street Journal, and many others. Over the last year, the Bank of Israel interest rate was gradually raised from 0.75% in September 2009 to 1.75% in September 2010.
(Source: Ministry of Finance, Bank of Israel, Globes)