Israel Interest Rate

The Bank of Israel kept the policy rate unchanged at 4.5% on July 8th 2024 for the fourth consecutive meeting. The Monetary Policy Committee highlighted that inflation and one-year inflation expectations remain near the upper limit of the target range and forecasts indicate that inflation will peak at 3.5% in early 2025 due to an anticipated VAT increase before moderating. Meanwhile, since the last policy rate decision, the shekel has depreciated by 1.3% against the US dollar. Additionally, the Research Department revised its macroeconomic forecast, predicting the war will continue until late 2024. Consequently, GDP growth projections have been lowered to 1.5% for 2024 and 4.2% for 2025, cumulatively 1.3 percentage points below the previous forecast.