Bank of Israel keeps interest rates steady after Gaza conflict resumes

JERUSALEM, April 7 (Reuters) - The Bank of Israel left short-term interest rates unchanged for a 10th straight meeting on Monday, staying cautious as the conflict between Israel and Palestinian Islamist group Hamas in Gaza has resumed after a brief pause in the fighting.

The central bank left its benchmark rate ILINR=ECI at 4.50%.

It reduced the rate by 25 basis points in January 2024 after inflation eased and economic growth slowed amid the Gaza war, but has kept policy steady since and said it is in no rush to ease again while inflation remains above target.

All 14 analysts polled by Reuters had expected no rate move on Monday.

With taxes and electricity and water prices rising at the start of this year, the annual inflation rate ILCPIY=ECI eased to 3.4% in February from 3.8% in January but remained above the government's 1-3% annual target.

The economy grew by an annualised 2.0% in the fourth quarter and 0.9% for all of 2024 due to the war.