JERUSALEM, Jan. 5 (Xinhua) -- Israel's central bank on Monday cut its benchmark interest rate by 25 basis points to 4 percent, a move that defied most analysts' expectations.
This marks the second consecutive rate cut in two months after the Bank of Israel held the rate steady at 4.5 percent for nearly two years. The previous adjustment was in late November when the bank lowered the rate by 0.25 percentage points.
The recent decision was driven by easing inflation, which has been stabilized within the government's target range of 1 to 3 percent.
"The inflation environment has moderated," the bank said. "The consumer price index for November declined by 0.5 percent, and annual inflation is 2.4 percent."
It noted future rate decisions would depend on inflation trends, economic activity, and geopolitical uncertainty.
In a statement Israeli Finance Minister Bezalel Smotrich called the rate cut a "necessary" step to support growth and lower the cost of living for citizens.
Ron Tomer, president of the Manufacturers Association of Israel, said the reduction would help ease the burden on exporters and improve industrial competitiveness.
