BoI governor: Rates will keep rising if needed, inflation worse than mortgage woes

Bank of Israel Governor Amir Yaron says Monday could be the last time interest rates are raised, with the pace of inflation appearing to slow, though it will all depend on economic numbers that come out before the next rate decision in three months.

Yaron tells Channel 12 news that BoI is “determined to lower inflation,” arguing that it causes more widespread hardships than the cost of rising interest rates on mortgages.

“The damage from inflation will be worse,” he says.

Yaron also responds to insults thrown his way by Communications Minister Shlomo Karhi, saying that Prime Minister Benjamin Netanyahu has made clear the bank’s independence.

“Sellers, players in Israel and outside of it, everyone agrees that they want to see an independent Bank of Israel,” he says.

In its rate hike decision earlier, the bank also published forecasts showing the country’s GDP shrinking by billion of dollars if the overhaul goes through, but growing if it is resolved somehow.

According to Yaron, “in every scenario there was damage,” to the economy, though the longer the public perceives that the issues around the overhaul will persist the worse it is.