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Bank of Israel Lowers Benchmark Interest Rate by 25 Basis Points Amid Easing Price Pressures

03 Sep 2026

The Bank of Israel lowered its key borrowing rate by 25 basis points, bringing borrowing costs to an almost four-year low as domestic inflation moderates sufficiently to allow the continuation of its monetary easing cycle.

Why it matters

The resumption of easing narrows real interest rate differentials against other currencies, putting modest downward pressure on the Israeli shekel while confirming that central bank priorities have shifted toward supporting economic growth in the face of ongoing regional instability.

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