Bank of Israel holds rate at 3.25% amidst Iran concerns
The Bank of Israel has announced today that it will keep the interest rate unchanged at 3.25%, despite inflation declining to 1.6% in September and the price index dropping by 0.5%. This decision comes amid political and security uncertainties ahead of the Knesset elections scheduled for next week, as well as increased security expenditures and tensions with Iran. With expectations of only a slight rate cut to around 3% in the coming year, the bank is focusing on geopolitical risks, especially the rising US dollar exchange rate, the increase in the budget deficit to 4.6% due to ongoing military spending, and is projecting economic growth between 3.4% and 7.5% for 2026 and 2027. Additionally, the bank's governor, Amir Yaron, denied any plans to cancel the 200 shekel banknote. Meanwhile, unemployment is expected to decrease as technological advancements continue, with the bank maintaining a cautious stance on monetary policy given the geopolitical and financial challenges.
Notice: This Is an AI-Generated Summary
Comments (0)