Bank of Israel May Cut Rates Further

Bank of Israel Potential Further Rate Cuts

Deputy Governor Andrew Abir told Reuters on Tuesday that July’s inflation rate of 1.5% was below the midpoint of the government’s 1 % to 3 % target range, which he identified as the primary justification for the most recent quarter‑point reduction in the benchmark short‑term interest rate. The cut brought the benchmark rate down to 3.25%, a level not seen for nearly four years and marking the third consecutive reduction in the policy rate.

Abir highlighted that the Israeli shekel’s strength against the U.S. dollar has contributed to the downward pressure on domestic price growth, contrasting Israel’s easing inflation with higher price trends observed globally. He added that the central bank sees no compelling reason to halt the process of lowering rates, indicating that further cuts could be considered provided inflation remains stable and the economy continues to respond positively to the policy easing.

The article notes that it was generated with AI assistance and reviewed by an editor, with the original source being Reuters.