The Bank of Israel should be ready to abandon its accommodative stance if inflation pressures continue to increase, said the International Monetary Fund on February 6.

In December, year-on-year inflation hit 2.8%. This is within the central bank’s target band of 1–3%, but it has increased from years of below-target inflation recently. One- and two-year ahead inflation expectations have rapidly increased over the last few months.

“If underlying upward pressures become more salient, the BoI