Israel’s economy expanded an annualized 2.7 percent in the first quarter, more than previously reported, reducing chances of a rate cut at the end of the month.
A Turkish rate cut tomorrow would be a “risky experiment” that could jeopardize the central bank’s inflation goals, according to Morgan Stanley & Co. economist Tevfik Aksoy .
Bank of Israel policy maker Rafi Melnick said the central bank isn’t considering setting a minimum exchange rate for the shekel, even as manufacturers are pressing it to do exactly that.
Turkish inflation slowed more than expected in April to the lowest level in two years, boosting expectations of looser monetary policy and sending bond yields to new record lows.
Israeli consumer prices rose more than expected in October because of increased costs for fruit and vegetables, and clothing, the Jerusalem-based Central Bureau of Statistics said today.
Morgan Stanley says the Turkish central bank will raise interest rates today, a move that could prove futile for bolstering the tumbling lira given risks the graft crisis embroiling the government will escalate.
The Bank of Israel may intervene in the foreign currency market more aggressively as the shekel’s gain is posing a risk to growth in the export-driven economy, according to Morgan Stanley.
Israel’s central bank has reached the end of its easing cycle after cutting the key lending rate 10 times since 2011, said analysts at banks including Barclays Plc and Morgan Stanley.
Bank of Israel Governor Stanley Fischer may increase the benchmark interest rate for the fifth time since August as growth and inflation forecasts climb.
"It is true that macro indicators have been giving mixed signals, but this one is yet another data point that would cause a serious hesitation for the Bank of Israel to consider a cut, as half the market expects."
- Tevfik Aksoy on Jun 16, 2014