Israel Interest Rate

The Bank of Israel left its key interest rate unchanged at 4.5% for a tenth straight meeting on April 7, 2025, in line with market expectations. The central bank’s policy continues to focus on stabilizing markets, reducing uncertainty, and supporting economic activity, particularly in light of the resumed Israel-Hamas conflict. Additionally, the impact of the US tariff policy and its anticipated consequences has prompted some caution. Policymakers noted that domestic inflation eased to 3.4% in February from 3.8% in January, still above the target range’s upper limit of 3%, with expectations for gradual moderation toward the target in coming months. Inflation is seen at 2.6% in 2025 and 2.2% in 2026. Meanwhile, the central bank revised its GDP growth forecasts to 3.5% for 2025 and 4% for 2026, both lower than previously projected in February.