(Adds Bank of Israel response)
JERUSALEM, Feb 20 (Reuters) - Israel's foreign minister
criticized the Bank of Israel for raising its benchmark interest
rate again on Monday and said he supported a process that would
halt further rate increases.
"In the context of moderating inflation, there was no
justification for today's interest rate hike," Foreign Minister
Eli Cohen wrote on Twitter.
In response, Bank of Israel Governor Amir Yaron suggested
that Cohen look at current data - which show inflation
continuing to rise - while respecting the central bank's
independence.
Israel's inflation rate hit a new 14-year high of 5.4% in
January, prompting the central bank to raise interest rates by
half a percentage point at a policy meeting on Monday to 4.25%,
it's eighth hike since last April.
Cohen wrote that he had asked Israel's finance minister to
"formulate an outline" with Yaron to stop more interest rate
hikes.
Yaron later said: "It's of course desirable, certainly as
foreign minister, that he understands the importance of the
central bank's independence. In all countries where the central
bank was harmed, we know what the final result was."
Deputy Bank of Israel Governor Andrew Abir told Reuters
that more interest rate increases were likely, to battle
"sticky" inflation and to show the bank's determination to move
the inflation rate back to a 1-3% target range.
(Reporting by Ari Rabinovitch and Steven Scheer; editing by
James Mackenzie and Susan Fenton)
Messaging: ari.rabinovitch@thomsonreuters.com@reuters.net))
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