Israel Interest Rate

The Bank of Israel maintained its policy rate at 4.5% on November 25, 2024, for the seventh consecutive meeting, amid persistent inflation and in line with expectations. Annual inflation stood at 3.5% in October, unchanged from September and above the target range. Meanwhile, Inflation is projected to rise in early 2025 due to a VAT increase before moderating toward the target’s upper limit in the latter half of the year. Moreover, geopolitical uncertainty hampers economic recovery, delaying a return to pre-war activity levels. The economy grew by 3.8% annually in Q3, though a negative gap persists due to supply constraints. Early Q4 indicators suggest mixed performance with slight weakening, while the labor market remains relatively tight despite some softening. As for the shekel, it strengthened since the last rate decision, gaining 0.9% against the US dollar and 6.4% against the euro.