Bank of Israel Unexpectedly Cuts Lending Rate

Israel’s central bank unexpectedly cut its benchmark interest rate to a three-year low and announced a program to purchase foreign currency to limit gains in the shekel. Israeli stocks and bonds rose.

The Bank of Israel, led by Governor Stanley Fischer, lowered the lending rate by a quarter of a percentage point to 1.5 percent, sending the shekel down the most since January. The bank said the steps were “in light of the continued appreciation of the shekel, taking into account the start of natural gas production from the Tamar gas field, interest rate reductions by many central banks --- notably the European Central Bank, the quantitative easing in major economies worldwide and the downward revision in global growth forecasts.”