Bank of Israel cuts interest rate to 3.5%

The Bank of Israel on Monday lowered its benchmark interest rate by 0.25 percentage points to 3.5%, marking its second consecutive cut, after inflation stabilized at 1.9%, near the midpoint of the central bank’s target range.

The Monetary Committee opted for a modest reduction despite pressure from exporters and other sectors for a steeper cut.

The move follows a similar quarter-point cut in May, when the rate was reduced to 3.75% amid easing inflation and a stronger shekel. In March and February, the bank held rates steady at 4%, citing regional security uncertainty and inflation risks, including rising fuel prices.