JERUSALEM, Jan. 10 (Xinhua) -- Israeli central bank, the Bank of Israel (BOI), announced on Wednesday to keep the interest rate at the historic low of 0.1 percent, which has been unchanged since March 2015.

The BOI explained the decision saying that since the previous interest rate decision, there has been no notable change in the inflation environment, which remains below the target range.

Inflation is expected to continue being affected by price reductions initiated by the government, increased competition in the economy, and by the cumulative appreciation of the shekel to date, said the BOI.

Wage increases in the economy, increases in energy prices, and the continued rise in rent prices will support the return of inflation to the target range, added the BOI.

According to the BOI, the Israeli currency new shekel has strengthened by about 5 percent in terms of the effective exchange rate in the past 12 months.

The housing market data continue to indicate some slowdown in activity, with a decline in the volume of transactions and a continued increase in home prices at a relatively moderate rate, said the BOI.

The BOI also predicted that the Israeli economy is expected to grow by 3.4 percent in 2018 and by 3.5 percent in 2019. The forecast is positively affected by the expected increase in vehicle imports in 2018 and by one-off investments expected in 2019.