FX.co ★ Israel Keeps Key Rate Unchanged for 10th Meeting

The Bank of Israel has decided to maintain its key interest rate at 4.5% for the tenth consecutive meeting as of April 7, 2025, aligning with market predictions. This decision reflects the central bank's strategy to stabilize financial markets, alleviate uncertainty, and bolster economic activity, especially given the renewed conflict between Israel and Hamas. Furthermore, the potential repercussions of U.S. tariff policies have necessitated a cautious approach. Although inflation decreased to 3.4% in February from 3.8% in January, it remains above the target range's upper threshold of 3%, with expectations of a gradual decline. The central bank has also adjusted its GDP growth forecasts, predicting a 3.5% growth for 2025 and 4% for 2026, both downgraded from the estimates made in February.