Israel Interest Rate

The Bank of Israel kept its key interest rate unchanged at 4.5% for a ninth straight meeting on February 24, 2025, matching market expectations, following a temporary surge in inflation and as economic activity continues to moderately recover amid global geopolitical developments. The central bank said that the the monetary committee's policy is focusing on stabilizing the markets and reducing uncertainty, alongside price stability and supporting economic activity. Israel’s annual inflation rate accelerated to 3.8% in January, its highest level since September 2023, from December's 3.2% and surpassing the upper limit of the central bank's target range of 1% to 3%, partially due to tax increases. However, inflation is predicted to fall within the target range in the second half of the year. Meanwhile, the first estimate of National Accounts data showed that the economy grew by an annualised 2.5% in Q4, moderating from 5.3% in the previous period.