Israel’s lowest borrowing rates since 2009 are spurring a burst of corporate bond sales, with companies taking advantage of falling yields to recycle debt and pare expenses.
Israeli consumer prices rose less than expected in April, slowing inflation to the lower limit of the government’s target and reviving the possibility of a further interest-rate cut.
The Bank of Israel may emulate Switzerland and the Czech Republic in setting a floor for the shekel, as the currency trades near its strongest in 31 months, according to HSBC Holdings Plc.
Ehud Barak, the former Israeli prime minister, doubled his money when he sold an apartment in north Tel Aviv’s Akirov Towers that he’d bought in 2003 for about 12 million shekels ($3.5 million).
Israel’s economy will probably expand 4.1 percent this year, powered by exports, consumer spending and home construction, the Central Bureau of Statistics said.
Israel’s failure to cap a surge in housing prices threatens to add a new drag on an already slowing economy.
Bank of Israel Governor Stanley Fischer raised the benchmark interest rate for the first time in four months in a bid to cool housing prices which he says could develop into a bubble.
Bank of Israel Governor Stanley Fischer, who last week unexpectedly cut the benchmark interest rate to a three-year low, may not be done yet, according to Jonathan Katz, an economist at HSBC Holdings Plc.
The Bank of Israel’s surprise interest-rate cut last month was another shot in a losing battle against one of the world’s strongest currencies.
Concerns that unemployment may climb outweighed worries about housing prices when the Bank of Israel decided to cut its benchmark rate, a member of the monetary policy committee said.
"As long as rates are so low and with a very real possibility and likelihood that the Bank of Israel will cut rates further, be it this month or next, this is a great opportunity for corporations to issue debt."
- Jonathan Katz on Jun 08, 2014