Israel's central bank on Monday announced an increase of 0.5 percent in the base interest rate to 3.75 percent, reaching the highest level since October 2008, Trend reports citing Xinhua.
This is the seventh consecutive rise in the base interest rate in Israel since April 2022 when the figure then stood at 0.1 percent.
The decision aims to curb the continuous rise of inflation, which reached 5.3 percent in November, the highest 12-month figure in over 14 years.
"High inflation involves growing uncertainty and increasing difficulty in making decisions at the household and the business levels," said Amir Yaron, Bank of Israel governor, adding that "it weighs on economic conduct, and adversely impacts growth and welfare, first and foremost amongst the weaker strata."
The bank explained that the interest rate increase was made possible due to strong activity in the Israeli economy, accompanied by a tight labor market.