Nonetheless, Barclays Capital analysts do not expect an interest rate hike in 2009.
Barclays Capital analysts expect the Bank of Israel to keep interest rates unchanged in this evening's decision. They say that they expect a gradual exit from the Bank of Israel's dollar purchase program will come before an interest rate hike.
Barclays Capital does note that inflation fears "seem to be gathering pace". While they do not expect the interest rate to be raised until the first quarter of 2010, they say that the risks are to the upside for rates in the near term.
Without an interest rate hike until 2010, Barclays sees the year end interest rate at the historic low of 0.5%. By the end of the first quarter of 2010, Barclays sees the interest rate at 0.75%, and forecasts a rise to 1.5% by the end of the second quarter of 2010.
Published by Globes [online], Israel business news - www.globes-online.com - on July 27, 2009
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