Maintaining Price Stability: The Bank of Israel's Sixth Decade Dr. - - PowerPoint PPT Presentation

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Maintaining Price Stability: The Bank of Israel's Sixth Decade Dr. - - PowerPoint PPT Presentation

Jul 05, 2023 182 likes •247 views

Maintaining Price Stability: The Bank of Israel's Sixth Decade Dr. Karnit Flug Governor of the Bank of Israel December 14, 2015 1 Actual Inflation and Inflation Expectations 2003-2015 SOURCE : CBS (Israel) & BOI 2 100 110 80 90 -4

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  • Dr. Karnit Flug

Governor of the Bank of Israel December 14, 2015

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Maintaining Price Stability: The Bank of Israel's Sixth Decade

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Actual Inflation and Inflation Expectations

2003-2015

SOURCE: CBS (Israel) & BOI 2

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  • 2

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03/07 06/07 09/07 12/07 03/08 06/08 09/08 12/08 03/09 06/09 09/09 12/09 03/10 06/10 09/10 12/10 03/11 06/11 09/11 12/11 03/12 06/12 09/12 12/12 03/13 06/13 09/13 12/13 03/14 06/14 09/14 12/14 03/15 06/15 09/15

Developments in the Background of Policy 2007-2015

Inflation and Target Range Output Gap

80 90 100 110

01/07 04/07 07/07 10/07 01/08 04/08 07/08 10/08 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11 01/12 04/12 07/12 10/12 01/13 04/13 07/13 10/13 01/14 04/14 07/14 10/14 01/15 04/15 07/15 10/15

SOURCE: CBS (Israel) & BOI 3

Nominal Effective Exchange Rate

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75 95 115 135 155 175 195 215 235 01/03 07/03 01/04 07/04 01/05 07/05 01/06 07/06 01/07 07/07 01/08 07/08 01/09 07/09 01/10 07/10 01/11 07/11 01/12 07/12 01/13 07/13 01/14 07/14 01/15 07/15 index

Loans for residential purposes Survey of home prices

4 SOURCE: CBS (Israel) & BOI

Survey of home price and loans for residential purposes 2003-2015

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500 1,000 1,500 2,000 2,500 3,000

01/07 06/07 11/07 04/08 09/08 02/09 07/09 12/09 05/10 10/10 03/11 08/11 01/12 06/12 11/12 04/13 09/13 02/14 07/14 12/14 05/15 10/15

0.1 1 2 3 4 5

01/07 06/07 11/07 04/08 09/08 02/09 07/09 12/09 05/10 10/10 03/11 08/11 01/12 06/12 11/12 04/13 09/13 02/14 07/14 12/14 05/15 10/15

QE

5 billion $

5 SOURCE: BOI

Bank of Israel policy tools

2007-2015

FX Intervention (US$) Interest Rate (%) Macroprudential Measures

Natural Gas Purchase program + Intervention

Building reserves

Intervention 1 2 3 4 5

01/07 06/07 11/07 04/08 09/08 02/09 07/09 12/09 05/10 10/10 03/11 08/11 01/12 06/12 11/12 04/13 09/13 02/14 07/14 12/14 05/15 10/15

Additional provision for high LTV loans Higher capital requireme nts for high LTV Variable Interest Rate limit LTV limit PTI limit and capital requirem ent Higher capital requirements for high LTV Higher capital requirements

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Thank you

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