Smotrich slams Bank of Israel for ‘wrong decision’ in leaving interest rates unchanged

Finance Minister Bezalel Smotrich takes aim at Bank of Israel Governor Amir Yaron for leaving interest rates unchanged, calling it a “wrong decision,” and urging him to reverse it.

“The decision to keep interest rates high is wrong and is not supported by the macroeconomic data of the Israeli economy,” Smotrich writes in a post on X. “The shekel is strong, inflation is weakening and has moved well within the government’s target range.”

“The main challenge today is growth and the need to ease conditions for Israeli citizens, households, mortgage holders and small and medium-sized businesses… as credit is choking the economy and delaying recovery,” says Smotrich.

Smotrich calls on the governor to “reverse his decision and continue the trend of reducing interest rates.”

The comments come after the Bank of Israel left interest rates on hold at 4 percent, citing rising tensions over potential hostilities with Iran. In January, the central bank cut borrowing costs by 25 basis points from 4.25% to 4%. In its previous rate decision in November, it had lowered the benchmark lending rate for the first time in almost two years to 4.25% from 4.5%, following a ceasefire agreement with the Hamas terror group.