Bank of Israel Holds Rates Amid Geopolitical Tensions

The Bank of Israel maintained its interest rates at 4.50% due to ongoing geopolitical tensions in Gaza and persistent inflation. Governor Amir Yaron warned that Israel's global isolation could damage its economy, although the bank remains cautious amidst local conditions despite external pressures.

The Bank of Israel decided to keep its short-term interest rates steady at 4.50% in light of Israel's continuing military actions in Gaza and ongoing inflation concerns.

Bank of Israel Governor Amir Yaron emphasized the potential economic fallout from Israel's growing international isolation, urging the country to bolster its global reputation. He stated, "Israel must do all that it can to strengthen its international standing, and thus ensure that the economy is open."

Despite calls for rate reductions and geopolitical uncertainties, particularly the U.S. and Israel's ongoing dialogue to resolve tensions, Yaron defended maintaining the current monetary policy stance. He cautioned that prolonged conflict could affect economic recovery by suppressing growth and expanding the budget deficit.

(With inputs from agencies.)