Israel cuts to record low, economy to shrink

The Bank of Israel slashed its key rate by 75 basis points to an all-time low of 1% on Monday and said that it now expected the economy to contract by 0.2% in 2009.

The cut, which is the sixth since October, surprised analysts who had largely expected a half-point cut. But the central bank, which had previously forecast growth of 1.5% for 2009, said that the degree to which the slowdown had intensified warranted more aggressive action.

"The reduction will help strengthen the economy's ability to

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