Bethel Finance news:
Meitav Investment House Ltd. chief economist Ron Eichal today predicted that the Bank of Israel will raise the interest rate by 25 basis points for May. He said that the 0.2% rise in the Consumer Price Index (CPI) for March was "unsurprising", and normal for the month. However, the rise was worrying given the current trend of prices.
Eichal said that housing prices are still worrying. New rental contracts rose by 0.6% in March. The Central Bureau of Statistics also reported that home prices (which are not included in the CPI) rose a further 1.7% in January-February.
The CPI rose 0.7% in the first quarter of 2011 and 4.3% in the 12 months through March. "In general, we could expect that this CPI would allow the Bank of Israel to relax as far as monetary tightening is concerned. However, in view of the rising food and fuel prices, the strong activity in the mortgage, and 12-month capital market inflation expectations of 3.5%, the Bank of Israel will probably decide to raise the interest rate by 25 basis points at the upcoming interest rate decision next Sunday, as well as tighter macro-prudential measures in the mortgage market," said Eichal.
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