Bank of Israel resumes easing, cuts policy rate by 25 bps to 3.75%

It had ⁠cut ​in ⁠November and January but paused in its two ⁠subsequent decisions due to the conflict with Iran ​and fears of a spike in ⁠supply-driven inflation. The annual inflation rate held at ⁠1.9% ​in April, well within a 1-3% target.

The ​Bank of ​Israel lowered short-term ‌interest rates ​for the third time in six months ‌on Monday as inflation remained contained despite a war with Iran, while the shekel stands ‌at a three-decade high against the ‌dollar. The central bank, as expected, reduced its benchmark rate to 3.75% from 4%. It had ⁠cut ​in ⁠November and January but paused in its two ⁠subsequent decisions due to the conflict with Iran ​and fears of a spike in ⁠supply-driven inflation.

The annual inflation rate held at ⁠1.9% ​in April, well within a 1-3% target. The U.S. and Israel launched ⁠airstrikes on Iran on February 28. A ceasefire ⁠forged ⁠on April 8 has held but remains fragile.