Israel: Central Bank cuts rates again in July
Latest bank decision: At its meeting on 6 July, the Central Bank decided to cut its policy rate by a further 25 basis points to 3.25%, following 75 basis points of cuts from October to May.
Soft inflation enables another cut: The Bank chose to ease policy partly owing to tepid inflation, which remains near the center of the Bank of Israel’s 1.0–3.0% target range. The blow to GDP growth from conflict with Iran and Hezbollah were likely further drivers of the cut to interest rates.
More reductions are possible: The Central Bank’s forward guidance was open-ended. Most panelists see the Bank staying on hold through the end of 2026, with a minority expecting rates to increase or fall.