Despite calls for a reduction in the discount rate, the Bank of Israel has decided to maintain the rates at 4.5% and 6% for the next six weeks. This decision is being made in light of the tense situations on the Lebanese border and ongoing hostilities in Rafah as part of the Iron Swords war, as well as the government budget deficit that has exceeded 7%.
The government’s budget deficit has caused further complications to the economic outlook, and this has also influenced the Bank of Israel’s decision to keep rates steady. Additionally, there are concerns about an expected increase in price index for May and June. Given these factors, the Bank of Israel is taking a cautious approach when it comes to making any changes to interest rates at this time.
It is important to closely monitor these developments in order to make informed decisions about future monetary policy adjustments. The Bank of Israel will continue to carefully assess the situation and make any necessary adjustments based on data and analysis from its experts.
