Economy

Bank of Israel Cuts Interest Rate to 3.25%

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Courtroom-sketch editorial illustration of the Bank of Israel headquarters in Jerusalem, showing its stepped concrete facade, broad central staircase, Israeli flags, street, and framing trees, drawn in warm ochre and slate-blue pastel with cross-hatching on sepia newsprint.

The Bank of Israel's Monetary Committee cut the policy interest rate by 0.25 percentage point, from 3.5% to 3.25%, effective September 3. The Bank said annual inflation stood at 1.5% after the consumer price index was unchanged in June and rose 0.3% in July. It also cited a tight labor market, a risk premium near pre-October 7, 2023 levels, and a 0.6% shekel appreciation against the dollar since the previous decision. The next rate decision is scheduled for October 21, 2026.

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