(Adds details, central bank comments)
By Steven Scheer
JERUSALEM, Oct 9 (Reuters) - The Bank of Israel appearscontent to keep interest rates on hold for now due to fears ofhigher housing prices while the local economy should weaken asthe global downturn persists, minutes of the discussions of lastmonth's decision showed.
The central bank left its benchmark interest rate
at 2.25 percent for a third straight month on Sept.24 -- a decision supported by all six monetary policy members.
It was the third straight unanimous vote for the MPC, whichis expected to keep its key rate unchanged until the end of2013, according to the Bank of Israel's own economists. AReuters poll ahead of the decision showed that just 6 of 14economists see one more cut by the end of 2012.
Bank of Israel officials pointed to a gap in economicactivity this year, with stronger than expected growth in thefirst half but pessimistic expectations ahead due to downwardrevisions of global growth forecasts.
"In terms of exports, it was agreed that the currenteffective exchange rate provides a comfortable environment forcontinued export activity, though an additional slowdown inglobal activity is liable to make export development difficult,"said the minutes, published on Tuesday.
Exports account for more than 40 percent of Israel'seconomic activity, while 60 percent of exports go to Europe andthe United States.
In its rates announcement, the Bank of Israel raised its2012 growth estimate to 3.3 percent from 3.1 percent but reducedits 2013 forecast to 3 percent from 3.4 percent.
Policymakers expressed concern that a decline in housingsupply, combined with higher demand in home sales and in newmortgages "will lead to renewed price increases" after housingprices had been stable for the past 12 months.
At the same time, a recent spike in inflation was deemed asa one-off event due to supply factors such as higher energy andother commodity prices and an increase in local taxes.
(editing by Ron Askew)
Keywords: ISRAEL RATES/MINUTES