Israel grapples with high house prices and low inflation
Central bank faces dilemma but is choosing to focus on inflation
The Bank of Israel sees house prices as the economy's main financial risk, and low interest rates may be making the problem worse, according to the central bank's latest monetary policy report, published today (August 3).
Inflation in Israel is projected to be just 0.1% in 2015, rising to 2% in 2016. The Bank of Israel cut its key interest rates by 15 basis points to 0.1% in March and has held it steady since then.
Members of the monetary policy committee expressed concern at previous meetings
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