Transcript
A (0:00)
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B (0:25)
Bloomberg Audio Studios Podcasts, Radio news We've got IMF meetings.
A (0:31)
Yes, they are underway. The imf, the imf, the World bank, everybody seemingly meeting in Washington this week and we've been covering all of it. Our colleague Bloomberg Surveillance co host Lisa Abramowicz is there. She's done a string of incredible interviews and she has another one for us here. Lisa will have to hand it over to you.
B (0:47)
Thank you so much. I really appreciate it. I am here with the bank of Israel Governor Amir Yaron. He does run the central bank. You also advise on financial policy at a time when the mood has cleared and there is a real sense right now in Israel that something significant has shifted. How much can you count on the war truly being over when crafting policy right now?
C (1:08)
Well, Lisa, first, thank you for having me. Again, it's important to understand a Israel entered very well 7 October 7 October did negatively impact Israel in a significant way. But the Israeli economy throughout these two years have shown remarkable resiliency. Now we are seeing that, that if this agreement, we hope it proves sustainable, that will bring sort of a lasting calmness and stability. And those are conditions that are definitely can unlock a lot of growth, rapid recovery both for Israel and maybe for the region at large.
B (1:50)
There's a lot of debt that has been incurred for during this whole endeavor. There's also inflation that's actually come in less than expected, which has opened the door maybe to the possibility that maybe you could cut rates even before the November meeting. Is that a possibility?
C (2:08)
The first thing to say about inflation, our monetary policy has actually proved itself in the sense that in spite of the war, wars are usually inflationary. Inflation has converged into our target which between 1 and 3% all throughout maintaining financial stability, which of course is very important. This was an encouraging CPI that came in. Right now we are at two and a half. But there are two fundamental forces that are working now with the cessation of the fighting. On the one hand, short, there's short of labor supply that has been there all the time. We're going to see probably some release of reserve people and that's going to help reduce inflation. We've seen the Shekel appreciate part of throughout time and in particular in the last, due to the cessation of the cease fire, then those are basically putting downward pressure on inflation. On the other hand, the optimism is potentially bringing a boost to demand. And so with these two offsetting forces, we want to see clarity a little bit on the forces that indeed inflation is converging more firmly. And we have some encouragement by the cpi. But we want to see this continues to go. And we are, because of the uncertainty, even about the agreements and everything, when we move, we still have to move very cautiously.