On Monday, Foreign Minister Eli Cohen criticized the central bank for raising its benchmark interest rate again, saying it was not justified when inflation was moderating. He also said he supported a process that would halt further rate increases, drawing admonition from Bank of Israel Governor Amir Yaron.
Israel's inflation rate hit a 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%, its eighth hike since last April. Bank of Israel Deputy 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. Smotrich also said that in the 2023-2024 state budget being formulated, "we will deliver a budget that invests heavily in infrastructure for economic growth as well as a package of assistance for those truly in need". (Reporting by Maayan Lubell; Editing by Steven Scheer and Himani Sarkar)
