Bank of Israel holds benchmark interest rate at 0.1 percent

August 29, 2016 10:08 AM EDT

An Israeli flag flutters outside the Bank of Israel building in Jerusalem August 7, 2013. REUTERS/Ronen Zvulun/File Photo

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JERUSALEM (Reuters) - The Bank of Israel left its benchmark interest rate at 0.1 percent for an 18th straight month on Monday, following a spate of stronger-than-expected economic news this month.

All 11 economists polled by Reuters had forecast no change by the central bank, with most also projecting no rate move until at least late 2017.

Buoyed by robust consumer spending, Israel's economy grew an annualised 3.7 percent in the second quarter of 2016, according to the government's preliminary estimate that was above a Reuters consensus of 2.6 percent growth.

The annual inflation rate improved to -0.6 percent in July - a five-month high - from -0.8 percent in June, although the rate remained well below the government's annual target range of 1 to 3 percent. Israel has been in a deflation trend for 23 months.

(Reporting by Steven Scheer; Editing by Tova Cohen)

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