Israel

Israel Monetary Policy January 2024

Israel: Central Bank kicks off loosening cycle in January

At its 1 January meeting, the Bank of Israel (BOI) lowered the policy rate by 25 basis points to 4.50%, meeting the expectations of most market analysts. The move marked the first cut since April 2020 and came on the heels of November’s hold and a cumulative increase of 465 basis points between early 2022 and May 2023.

The move was driven by the need to reduce uncertainty amid the ongoing war with Hamas, as the Bank tried to stabilize markets, while ensuring price stability and supporting overall economic activity. Moreover, inflation has continued to decline, and inflation expectations remained anchored within the BOI’s 1.0–3.0% target range. All these factors gave the Bank ample room to kick off its loosening cycle.

The communiqué was void of forward guidance. However, the Bank shifted its focus toward supporting economic activity amid the war and declining inflation. All of our panelists see further cuts this year.

The next meeting is set for 26 February.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest X Download Fullscreen