The central bank’s benchmark rate was reduced to 4.00% from 4.25%.
The Bank of Israel unexpectedly cut its short-term interest rate by 25 basis points on Monday, a second successive cut after lowering it in November for the first time in nearly two years.
The central bank’s benchmark rate was reduced to 4.00% from 4.25%.
Annual Israeli inflation eased to a rate of 2.4% in November, within the government’s 1-3% target range.
Supply constraints had stoked inflation during the two year war in Gaza that ended with a U.S.-brokered ceasefire in October 2025.
Despite easing price pressures and a four-year high for the shekel versus the dollar, nine of the 10 economists polled by Reuters had forecast the central bank would hold rates this month, while one economist expected a quarter-point reduction.
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