Bank of Israel Cuts Interest Rate for Third Consecutive Time
Translated & summarized from Ynet by baba
The Bank of Israel lowered its benchmark interest rate by 0.25% for the third time in a row, bringing it to 3.25%. The decision was driven by the annual inflation rate dropping to a low of 1.5%.
The story in 6 lines · by baba
- Bank of Israel cut interest rates by 0.25%.
- This is the third consecutive rate cut.
- The new base interest rate is 3.25%.
- Prime rate is now 4.75%.
- Low inflation of 1.5% prompted the cut.
- The cut defied market expectations.
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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