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The
bank's monetary committee voted 3-1 in favor of the change,
which will come into effect sometime in 2017. It said a schedule
for next year's interest rate decisions would be published in
the coming weeks.
The central bank has been examining such a change for months,
noting that "the global trend is to reduce the frequency of the
decision".
"A frequency of monthly decisions is today mostly a feature of
developing economies, and economies characterized by a high
basic rate of inflation," the central bank said.
Israel's economy is stable enough, the committee determined,
that the benefits, like allowing for better analysis of economic
trends, outweigh the loss in flexibility of monthly decisions.
"The volatility of Israel’s main economic variables - GDP,
inflation, and effective exchange rate - is not high in
international comparison," the bank said. "Rapid responses to
stabilize (long-term inflation) expectations are not required."
The frequency of interest rate decisions was recently reduced to
eight at the European Central Bank, the Bank of Japan and the
Band of England to match that of the U.S. Federal Reserve.
The committee members also said that in those cases, "a negative
market reaction was not seen."
(Reporting by Ari Rabinovitch and Tova Cohen; Editing by Steven
Scheer, Larry King)
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