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Bank of Israel leaves October lending rates unchanged, as expected

Governor David Klein's decision was inspired by rising inflation expectations and fears of the shekel weakening

The Bank of Israel today published its monetary plans for October. As expected, the central bank left the key lending rate unchanged at 6.3%.

Inflation expectations are on the rise, the bank explained, and the shekel is expected to continue to weaken.

The central bank was not unmoved by fear that the terror attacks on the U.S., on September 11, could lead to lower prices and prolong Israel's recession.

"Against this background," read the bank¿s announcement, "and against the growing uncertainty, the central bank's decision to leave the lending rate unchanged is consistent with the inflation goals set by the government."

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Since expectations in the market were lending rate would be left untouched, market players are not expected to react.