War's economic ramifications increase, Bank of Israel says

By Gokhan Ergocun

ISTANBUL (AA) - Bank of Israel has kept its policy rate at 4.5% on Wednesday by saying "Since the outbreak of the war, and in recent months in particular, geopolitical uncertainty and its economic ramifications have increased."

"These, alongside the fiscal uncertainty, are also reflected in the high yield spreads between Israeli government bonds and US bonds, and in CDS spreads that are near record levels," it added.

The bank said inflation is also on an upward trend in the recent months and it is above of the target range.

The rise in the inflation rate primarily reflects the increase in the rate of change in prices of the non-tradable components, it added.

In the country, there is a labor supply constraint due to the impact of the war, the bank recalled.​​​​​​​