JERUSALEM, Oct. 23 (Xinhua) -- Israel's central bank on Monday kept its benchmark interest rate unchanged at 4.75 percent amid the ongoing Israel-Hamas conflict.
"Since the outbreak of the war, there has been a further significant depreciation of the shekel, in addition to the depreciation since the beginning of the year," the bank said.
It added that since the previous interest rate decision, the shekel has weakened by 6.3 percent against the U.S. dollar and by 4 percent against the euro.
According to an analysis by Dun & Bradstreet Israel, lowering the interest rate would have encouraged businesses and consumption, and made it easier for households to make mortgage payments.
However, it was not carried out by the bank mainly due to the devaluation of the shekel and the increase in Israel's risk premium, the data and analytics company added.
Meanwhile, the bank also revised its macroeconomic projections based on the preliminary data collected since the beginning of the fighting.
Assuming that the conflict remains primarily focused on the southern Gaza front in the fourth quarter of the year, the bank now forecasts that GDP will expand by 2.3 percent in 2023 and by 2.8 percent in 2024.
These updated growth rates are lower compared to the previous forecast in July, which had projected a 3 percent growth for both years. ■
