Members of the Bank of Israel's Monetary Committee agree that Operation Pillar of Defense
did not have any far-reaching effects on the Israeli economy, according to protocols of the discussions held ahead of last month's decision to leave interest rates unchanged at 2%.
The committee members noted unanimously that the Gaza operation would have no effect on the economy's current and future growth rate, which is expected to remain unchanged at 3% per year.
They also agreed that the operation had no effect on the Israeli shekel's exchange rate or on the Stock Exchange, and that although the costs of fighting would require a one-time addition to the security budget, it would have no significant influence on the state budget.
It was also noted that at this stage, the Israeli government's debt repayments in the beginning of 2013 would likely be relatively low. Therefore, the committee members said, the shift to a temporary budget following the decision to move up the elections to January 2013 was not expected to have a moderating effect on the economy.
The committee members agreed that it was still premature to examine the affects of the Bank of Israel's recent decision in regards to the housing market – limiting mortgages to a certain percentage of the apartment's value.
The bank's Monetary Committee, which sets the monthly interest rate, is comprised of six members: Bank of Israel Governor Stanley Fischer, his deputy, his special monetary advisor, and three external members – Professors Reuven Gronau, Rafi Melnick and Alex Zuckerman.
The committee members vote on their decisions, and in case of a tie – the governor has the right to an additional vote.