Bank of Israel cuts rates for second time in Q3, cites inflation, GDP growth

The Bank of Israel (BoI)'s Monetary Committee cut the interest rate by 0.25% to 3.25% on Tuesday.This comes amid a backdrop of a relatively moderate inflation rate and rapidly growing gross domestic product (GDP) in recent months and constitutes the third consecutive interest rate reduction in the past 12 months.While uncertainty in the economy remains high, Israel's risk premium continued to remain at levels similar to those prevailing before the October 7 massacre, and the shekel's exchange rate with key global currencies remained without significant change.The committee's policy focuses on price stability, support for economic activity, and market stability, BoI said.“The interest rate path will be determined according to developments in inflation, economic activity, geopolitical uncertainty, and fiscal developments,” BoI noted.Israel's Consumer Price Index remained unchanged in June and rose by 0.3% in July.