Bank of Israel lowers interest rate

Israel's central bank is to reduce its benchmark interest rate for January by a quarter of a percentage point to 1.75 per cent, it said in a statement on Tuesday. "The decision to reduce the interest rate for January 2013 by 0.25 percentage points, to 1.75 per cent, is consistent with the Bank of Israel's interest rate policy, which is intended to entrench the inflation rate within the price stability target of 1.0-3.0 per cent a year over the next twelve months," the bank said. "Against the background of the need to provide additional support for economic activity and the absence of inflationary pressures at this time, the Monetary Committee decided to reduce the interest rate by 0.25 percentage points." The bank cited a range of factors for its decision, including "continued decline in the inflation environment," weak growth and the shekel's comparative strength, and the elevated level of risk from the world economy.