Bank of Israel: Interest rate to stay at 4.5%, inflation this year will be 3.8%
The BoI decided to maintain the current interest rate despite the Fed lowering its rate, due to the security situation and expanding government debt.
The Bank of Israel announced today (Wednesday) that it was leaving the country's key interest rate in place at 4.5% for the sixth time, contrary to the decision of the Federal Reserve to reduce its interest rate weeks ago.
According to the BoI's research department, this decision came due to forecasted increased inflation during the current year, expected to reach 3.8% and decline to 3.2% in 2025, as well as the serious security situation and the possibility of the war's expansion, as well as the increased Israeli government deficit.
The research department further stated that due to these circumstances, the 4.5% interest rate would likely hold deep into the third quarter of 2025.