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Bank of Israel cuts interest rates by 25 basis points

BY Reuters | ECONOMIC | 01/05/26 09:04 AM EST

JERUSALEM, Jan 5 (Reuters) - 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. (Reporting by Steven ?Scheer; Editing by Toby Chopra)

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