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Israel's Central Bank Cuts Interest Rate by 25bps

BY MT Newswires | ECONOMIC | 01/05/26 11:41 AM EST

11:41 AM EST, 01/05/2026 (MT Newswires) -- Israel's central bank (BoI) Monday said its Monetary Committee decided to lower the interest rate by 25bps to 4.0%, marking a consecutive reduction.

The inflation environment has "moderated," the central bank noted in its policy statement, citing the fact that the consumer price index for November was at 2.4% year over year.

The inflation rate is expected to be 1.7% this year and 2.0% in 2027, added the BoI.

According to the central bank's research department forecast, which was formulated under the assumption that the ceasefire in Gaza will continue, gross domestic product grew by 2.8% in 2025, and is expected to grow by 5.2% this year and by 4.3% in 2027.

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