JERUSALEM, Nov. 25 (Xinhua) -- Israel's central bank announced Monday that it will keep the base interest rate for the next six and a half weeks at the rate of 0.25 percent.

The bank assesses that due to Israel's low inflation, the monetary policies of major central banks, the slowing of the global economy, and the continued appreciation of the new shekel, it will be necessary to leave the interest rate at its current level for a long period or even reduce it.

This policy aims to support a process at the end of which inflation will stabilize around the midpoint of the governmental annual target range (1 to 3 percent), and so that the economy will continue to grow strongly.

Israeli inflation in the past 12 months was 0.4 percent, below the target range. Moreover, in the past two months there has been a decline in inflation excluding energy, fruits and vegetables, due to the appreciation of the shekel and the slowdown in the increases in housing and food prices.

The Israeli bank noted that one-year inflation expectations remained stable around the lower bound of the target range, while medium and long-term expectations declined slightly.

The bank also explained that since the beginning of the year, the shekel has strengthened by 8.9 percent, and the appreciation continues to make it difficult to return inflation to the target range.

The bank added that "The political situation remains uncertain, and if the government is forced to operate on a continuance budget for a prolonged period, it may have a contractionary effect." Enditem

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