Bank of Israel Seen Cutting Rate This Week
The central bank cited 1.9% inflation and lower energy costs after the ceasefire, while staff forecast rates easing to 3% next year.
- On Monday, the Israel Monetary Committee lowered the national interest rate to 3.5% from 3.75%, marking the second consecutive cut following an initial 0.25% decrease in late May.
- A U.S.-Iran ceasefire agreement prompted the decision, as the bank noted lower energy prices and stabilized geopolitical tensions helped the economy recover from a 3.8% contraction.
- Annual inflation held at 1.9% in May, well within the 1-3% target range, though policymakers remain cautious about geopolitical risks and their influence on the exchange rate.
- Finance Minister Bezalel Smotrich criticized the move on Twitter, stating a "minimal reduction" fails to address economic challenges and makes it harder for the high-tech sector and exports.
- The Israel Research Department forecasts 4% GDP growth in 2026, rising to 5.5% in 2027, with staff estimating the interest rate may slip toward 3% in the coming year.
12 Articles
12 Articles
Bank of Israel cuts interest rate to 3.5%
The Bank of Israel on Monday lowered its benchmark interest rate by 0.25 percentage points to 3.5%, marking its second consecutive cut, after inflation stabilized at 1.9%, near the midpoint of the central bank’s target range.The Monetary Committee opted for a modest reduction despite pressure from exporters and other sectors for a steeper cut.The move follows a similar quarter-point cut in May, when the rate was reduced to 3.75% amid easing infl…
Bank of Israel cuts interest rate but warns against more military spending
The central bank also revised down its deficit projections, but the change is conditional on Israel's defense spending remaining within the state budget. Both the IDF and Prime Minister Benjamin Netanyahu are seeking an additional 25 billion shekels ($8.3 billion) for defense
Bank of Israel lowers interest rate to 3.5% in response to strong shekel, halt in war with Iran
The Bank of Israel Monetary Committee, headed by Amir Yaron, announced that the national interest rate will be lowered once again to 3.5% as inflation declines and the shekel remains strong.
Bank of Israel cuts key rate by 25 bps as US-Iran ceasefire pushes down energy prices
By Steven Scheer JERUSALEM, July 6 (Reuters) - The Bank of Israel cut short‑term interest rates for a second straight meeting on Monday, citing stable inflation and a U.S.–Iran ceasefire deal that has pushed down energy prices. The central bank, as wi...
(Cairo=Yonhap News) Correspondent Kim Sang-hoon = As Israel has been waging a multi-faceted war against Iran and its proxies following its war with the Palestinian militant group Hamas, this...
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