(Adds comments, background)
JERUSALEM, Jan 21 (Reuters) - All six rate setters at the Bank of Israel voted to keep the benchmark interest rate at 0.25 percent on Jan. 7, minutes of the discussions showed on Monday.
The decision was the first to be made under new central bank governor Amir Yaron.
The committee members said “the process of raising the interest rate is expected to be gradual and cautious” to support the return of inflation to the midpoint of a 1-3 percent target range, according to the minutes.
Inflation has been hovering at the lower edge of the target in recent months.
“The committee discussed the potential for declines in financial markets and the lack of stability seen in them in recent weeks to impact on the domestic economy,” the minutes added.
“The members assessed that the developments to date will impact directly on the real economy to only a small extent.”
At the same time, the minutes said there was some concern that if capital market declines abroad lead to a slowdown in advanced economies, it would negatively impact demand for Israeli exports.
In its previous decision in November, the committee had voted to raise the interest rate from 0.1 percent, the first rate increase in more than seven years. (Reporting by Ari Rabinovitch and Tova Cohen; Editing by Andrew Cawthorne)