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Foreign Minister Criticizes Central Bank's Interest Rate Hike in Israel

Israel's foreign minister criticizes the central bank's interest rate hike, calling for an outline to halt future hikes. The central bank responds by emphasizing the importance of its independence and the likelihood of further rate increases to combat inflation.

Eli Cohen, Israeli Foreign Minister
Eli Cohen, Israeli Foreign Minister

The Bank of Israel raised its benchmark interest rate again on Monday, but the country's foreign minister criticized it. Eli Cohen, Israel's foreign minister, took to Twitter to express his disappointment in the hike and stated his support for a process that would prevent future increases.

Central Bank Responds to Criticism

In response to the foreign minister's criticism, Bank of Israel Governor Amir Yaron suggested that Cohen examine the current data, which showed inflation continuing to rise, and respect the central bank's independence.

Amir Yaron, Bank of Israel Governor
Amir Yaron, Bank of Israel Governor

Rise in Inflation Prompts Interest Rate Hike

Israel's inflation rate reached a 14-year high of 5.4% in January, which prompted the central bank to raise interest rates by half a percentage point to 4.25% - its eighth hike since last April.

Foreign Minister Calls for Outline to Halt Interest Rate Hikes

Foreign Minister Cohen called on the finance minister to work with Bank of Israel Governor Yaron to formulate an outline to stop future interest rate hikes.

Central Bank Stands by its Independence

Governor Yaron emphasized the importance of the central bank's independence and warned of the consequences of harm to central banks in other countries. Meanwhile, Deputy Bank of Israel Governor Andrew Abir stated that more interest rate increases were likely to combat "sticky" inflation and to bring the inflation rate back to a 1-3% target range.