Bank of Israel holds rates as Iran war likely to spark inflation

JERUSALEM, March 30 (Reuters) - The Bank of Israel left short-term interest rates unchanged for a second straight month on Monday as expected, amid fears of a rise in inflation stemming from the conflict with Iran that has driven up oil prices.

After cuts in November and January following a ceasefire in Gaza, the central bank held steady last month to leave its benchmark rate ILINR=ECI at 4%.

Israel's annual inflation rate moved higher in February to 2.0% from a 4-1/2-year low of 1.8% in January, staying well within an official target range of 1-3%.

All 13 economists polled by Reuters had projected no move, citing the U.S. and Israeli strikes launched on February 28 that has resulted in Iran largely shutting the Strait of Hormuz, sending oil prices soaring.