The Bank of Israel lowered its benchmark interest rate by a quarter point to 3.5%, from a peak of 4.75%, providing relief for mortgage holders. The central bank signaled two additional rate cuts this year, aiming for 3%, according to the announcement.
The Bank of Israel on Monday cut its benchmark interest rate by 0.25 percentage points to 3.5%, the central bank announced. The move brings the rate down from a peak of 4.75% reached during the previous tightening cycle, and is expected to provide relief for mortgage holders and borrowers. The bank signaled that two additional rate cuts are expected in 2026, with the target rate at 3%.
The decision was widely anticipated. As The Zioneer reported on July 5, analysts had predicted a quarter-point cut at the monetary policy committee's meeting. The rate cut was welcomed by business leaders, with Chairman of the Business Sector Presidency Dubi Amitai calling it 'crucial relief' that enables investment and hiring, as The Zioneer reported earlier today.
The current rate reduction is part of a broader easing cycle as the economy transitions from the war period. The Bank of Israel's next decisions will be closely watched for further signals on the pace of easing.
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Source and signal
- Internal intake