Five of six Israel MPC members voted to leave key rate at 0.1 percent – minutes

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An Israeli flag flutters outside the Bank of Israel building in Jerusalem August 7, 2013. REUTERS/Ronen Zvulun

JERUSALEM (Reuters) – Five of the six rate setters at Israel’s central bank voted to keep the benchmark interest rate at 0.1 percent on July 9, the same it has been for more than three years, minutes of the discussions showed on Monday.

For the fourth decision in a row, one member voted for a 15 basis point rate increase to 0.25 percent, given Israel’s rising inflation. The rate reached 1.3 percent in June, moving into the 1-3 percent target for the first time since 2014.

“Most committee members noted that to establish that the inflation environment is entrenched within the target, they will want to be sure, to the extent possible, that the return of inflation to within the target range will not only last for a few months,” the minutes said, adding that rising wages and oil prices were helping to push the inflation rate higher.

“The interest rate should be kept at its low level to

support its entrenchment within the target range,” it said.

The bank’s own economists project a rate hike in the fourth quarter.

(Reporting by Steven Scheer, Editing by Ari Rabinovitch)

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