Bank of Israel cuts rates to 4.0% as inflation moderates

Governor Amir Yaron's Monetary Committee voted to lower the benchmark rate by 25bp to 4.0%, the second consecutive cut, citing moderating inflation, a stronger shekel and improving labor-market data. The Bank of Israel forecast projected further cumulative cuts of 0.5 percentage points by the end of 2026 if geopolitical and fiscal conditions remain stable.