Israel

Israel Interest Rate

Israel Interest Rate

BOI Interest Rate in Israel

The BOI Interest Rate ended 2022 at 3.25%, up from the 0.10% end-2021 value and higher than the rate of 1.00% a decade earlier. For reference, the average BOI Interest Rate in Middle East & North Africa was 5.80% at the end of 2022. For more interest rate information, visit our dedicated page.

Israel Interest Rate Chart

Note: This chart displays Policy Interest Rate (%) for Israel from 2016 to 2023.
Source: Central Bank of Israel.

Israel Interest Rate Data

2018 2019 2020 2021 2022
BOI Interest Rate (%, eop) 0.25 0.25 0.10 0.10 3.25
10-Year Bond Yield (%, eop) 2.27 0.96 0.77 1.28 3.58

Central Bank keeps interest rates unchanged in April

At its 8 April meeting, the Bank of Israel (BOI) kept the policy rate unchanged at 4.50%, mirroring the decision at the February meeting which had followed January’s 25 basis-point cut.

The decision not to cut rates further was likely driven by the recovering economy and labor market, shekel depreciation and a rise in near-term inflation expectations. On the flipside, additional rate hikes were not warranted given that inflation is currently within the BOI’s 1.0–3.0% target range and that the war is still hampering the economy somewhat.

There was no explicit forward guidance in the Central Bank’s press release, with future inflation and the developments of the war likely to play a key role in determining monetary policy ahead. All of our panelists see further cuts this year given that inflation is forecast to remain well within the target range.

On the reading and outlook, Goldman Sachs analysts said: “We think inflation momentum is likely to remain relatively benign in the near term and support inflation staying within the BoI's 1-3% target range through this year. Furthermore, despite the recent period of Shekel weakness, the exchange rate remains stronger compared to September [...]. [...] our base case remains that rate cuts will resume at the next MPC in May and continue beyond, if the recent geopolitical uncertainty and Shekel's weakness continues, we believe risks are tilted towards another on-hold decision.”

Consensus Forecasts and Projections for the next ten years

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Israeli interest rate projections for the next ten years from a panel of 9 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Israeli interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Israeli interest rate projections.

Want to get access to the full dataset of Israeli interest rate forecasts? Send an email to info@focus-economics.com.

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