The Bank of Israel decides to lower interest rates to 3.75 percent in the face of a strong shekel, moderating inflation, and mounting prospects for a deal to end the war with Iran.
The central bank trims borrowing costs from 4% to 3.75%, marking the second rate cut this year. In its previous two rate decisions in March and February, the Bank of Israel left borrowing costs on hold, after two cuts in January and November, respectively.
“There is still significant geopolitical uncertainty, both domestically and globally,” the central bank says in a statement, noting that the war with Iran “had an impact on real economic activity, and the most recent data show a recovery.”
The central bank notes that “inflation in Israel remains around the midpoint of the target.” Annual inflation in April was steady at 1.9% and remained well within the government’s target range of between 1% and 3%.
The shekel has surged to a 33-year high and was trading today at around 2.89 per dollar.
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From the Liveblog of
Monday, May 25, 2026
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