Bank of Israel keeps rates steady amid Iran tensions
JERUSALEM, Feb 23 (Reuters) - The Bank of Israel held short-term interest rates steady on Monday after two successive cuts, amid fears of a U.S. strike on Iran that overshadowed easing inflation pressures and a strong shekel ILS=.
After cuts in November and January, the central bank opted to leave its benchmark rate ILINR=ECI at 4% despite an October U.S.-brokered ceaesefire between Israel and Palestinian militant group Hamas took hold and helped to relieve supply constraints that had pushed up prices during the two-year Gaza war.
The annual inflation rate eased to a 4-1/2-year low of 1.8% in January - well within an official target range of 1-3% - from 2.6% in December.
Of the 13 economists polled by Reuters, seven had expected a rate cut while six projected no move due to worries over a possible U.S. attack on Iran, which would likely prompt Iranian retaliation on Israel.
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