Bank of Israel cuts interest rates by 25 basis points
Supply constraints have stoked inflation during the two-year war in Gaza, which ended with a US-brokered ceasefire
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[JERUSALEM] The Bank of Israel unexpectedly cut its short-term interest rate by 25 basis points on Monday (Jan 5), a second successive cut, after lowering it in November for the first time in nearly two years.
The central bank’s benchmark rate was reduced to 4 per cent from 4.25 per cent.
Annual Israeli inflation eased to a rate of 2.4 per cent in November, within the government’s 1 to 3 per cent target range.
Supply constraints had stoked inflation during the two-year war in Gaza, which ended with a US-brokered ceasefire in October 2025.
Despite easing price pressures and a four-year high for the shekel versus the US dollar, nine of the 10 economists polled had forecast that the central bank would hold rates this month, while one economist expected a quarter-point reduction. REUTERS
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