Israel

The Bank of Israel is still in the process of front-loading interest rates and will likely raise rates to above 3.5%, Deputy Governor Andrew Abir said on Monday after a half-point rate increase to 2.75%, Reuters reported. Abir told Reuters that the central bank preferred "to err on the side of making sure we get inflation down" with its monetary policy. That means, he said, that the benchmark rate would likely go above the bank's own economists' forecast of 3.5%. Read more.

The Tel Aviv Stock Exchange (TASE) said on Monday it would reshape its ownership structure and also create a blockchain platform to allow more trading of crypto currencies in an effort to match international standards, Reuters reported. TASE, which went public in 2019, said it would create a new publicly traded holding company that will own 100% of the bourse, which will become a private firm. Subsidiaries of the exchange will be units of the new holding company. It said its board had given the nod to the plan but approval from the regulator and TASE shareholders were still awaited.

The Bank of Israel on Monday raised its benchmark interest rate by three-quarters of a point for the second meeting in a row, citing its determination to move inflation back to within its target, Reuters reported. The central bank lifted its key rate to 2.75% from 2.0% in its fifth straight decision to hike rates. In April, policymakers had begun raising the rate from 0.1% -- an all-time low where it had stayed for the prior 15 decisions since a 0.15 point reduction at the outset of the COVID-19 pandemic.

El Al Israel Airlines plans to repay a $45 million loan that it took from the government during the COVID-19 pandemic by the end of the year, under a deal reached between the airline and Finance Ministry, they said on Sunday, Reuters reported. The loan was part of a government package to help the airline weather the crisis, in which Israel's borders were closed to foreign tourists for nearly two years, sending revenue and profit at Israel's flag carrier tumbling.

The Bank of Israel raised its benchmark interest rate on Monday by three-quarters of a percentage point, its biggest hike in two decades, and appeared on track for further increases as it tries to rein in inflation that has topped 5%, Reuters reported. The central bank lifted its key rate to 2.0% from 1.25%, continuing a tightening cycle that began in April when policymakers first raised the rate from 0.1%, an all-time low set at the outset of the COVID-19 pandemic.

The Bank of Israel delivered an interest-rate hike that exceeded most forecasts to signal the start of a rare monetary tightening cycle in the face of inflation it now expects to peak later and at a higher level, according to the deputy governor, Bloomberg News reported. Andrew Abir, a voting member of the monetary committee and the central bank’s No. 2 official, said Israel’s inflation -- currently above the government’s 1%-3% target range -- will likely only begin to decline in the second half of the year.

Sharp declines in financial asset prices, higher inflation and a new significant wave COVID-19 infections pose the greatest risks to the global economy, the Bank of Israel said on Monday in its twice yearly financial stability report, Reuters reported. And although Israeli banks and insurance companies maintained stability in the second half of 2021 with strong capital ratios, that could be derailed should financial asset prices fall further, the report said. Israeli stock prices have dipped 1.1% so far this year, on the heels of global declines, after a 31% rise in 2021.

Israel's government said on Thursday it would give additional aid to El Al Airlines to help compensate for the reimposition of a COVID-19 entry ban on foreign tourists and restrictions on overseas travel by Israelis, Reuters reported. Israel's flag carrier will receive tens of millions of dollars from the state and El Al's controlling shareholders to help it weather the pandemic, and the rapid spread of the Omicron variant, according to a Finance Ministry statement.

Israeli airlines are facing new waves of mass layoffs and potential collapse as the global aviation market continues to be pummeled by the COVID-19 pandemic, the Jerusalem Post reported. With long lists of travel restrictions and dashed dreams for summer tourism due to the emergence of the delta variant, millions around the world are in immediate danger of losing their jobs.

There was a 38% increase in the number of Israelis filing for bankruptcy and opening debt cases with legal aid in 2020 during the coronavirus crisis, a market study has found, the Jerusalem Post reported. Oded Chen law firm, one of the country’s leading law firms in the field of insolvency, bankruptcy and debt cancellation, found that approximately 24,000 debt cases were opened with legal aid in 2020, of which about 9,000 were bankruptcy and insolvency proceedings of individuals.