Gaza conflict helped trigger Israel interest rate cut
Bank of Israel Governor Karnit Flug said the central bank reduced interest rates for a second straight month on Monday to help the economy deal with a global slowdown and Israel's conflict with Hamas in Gaza.
The central bank lowered its benchmark rate to 0.25 percent - an all-time low - from 0.5 percent, confounding expectations of no move.
"Our intention in reducing the interest rate is in effect to help the economy strengthen its capability to recover from a weakness it finds itself in both due to the global slowdown and the fighting," Flug told Israel Radio following the rate cut.
"We're not in a recession but we are definitely in a slowdown in activity. We saw this in the quarter before the fighting, we saw the economy slowing mainly because of the situation in the global economy, the reduced demands in our main markets and jointing this trend now is an additional slowdown as a result of the effects of the fighting," she added.
