Bank of Israel Cuts Interest Rate for Third Consecutive Time
The Bank of Israel announced a quarter-percentage-point reduction in the benchmark interest rate, marking the third consecutive cut and the fourth since the beginning of 2026. This decision went against the majority of market expectations.
The new base interest rate will be 3.25%, with the prime lending rate set at 4.75%. The primary justification for this easing measure is the annual inflation rate, which has fallen to just 1.5%. This is the lowest level recorded since May 2021 and is less than half of the government's price stability target range of 1% to 3%.
This low inflation figure provides the Bank of Israel with significant room to continue its monetary easing policy.
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