Bank of Israel Governor Dr. Karnit Flug may decide tomorrow [Monday] to lower the interest rate to an unprecedented low of 0 percent, Channel 10 reports this evening.
The unusual move comes against the backdrop of data from the last 24 hours, according to which 35 million shekels of public funds were wiped off the stock exchange.
The leading indices, the Tel Aviv 25 and Tel Aviv 100, fell today by almost four percent. In response, concerns developed among the stock exchange's financial managers about continued decline.
The looming interest rate cut may spur stock market money managers to inject money into the market despite the uncertainty.
The decline in the leading indices comes against the backdrop of the global crisis, during which trillions of dollars were wiped out, as a result of concerns about the Chinese economy and its impact on other trading partners. During the crisis, the Dow Jones and Nasdaq indices on the New York Stock Exchange each fell by about three percent. Subsequently, during the day, the companies Teva lost 3.1 percent, Bank Leumi 5.0 percent, Idan Ofer's KIL 5.2 percent, Yitzhak Tshuva's Delek 4.9 percent, and the real estate companies Ashtrom and Properties and Building about 6.7 percent - the hardest hit.
Fears that the global crisis will also affect the Israeli economy led Finance Minister Kahlon to order a series of new programs to encourage exports to the country, after growth in Israel in the last quarter was about one-tenth that of countries identified with the global crisis, such as Greece and Spain.
It should be noted that in recent years, the Israeli economy has been characterized by a high growth rate relative to OECD countries, while continuously improving the labor market, the debt-to-GDP ratio, and tax revenues.
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