JERUSALEM, Sept. 1 (Xinhua) -- Israel's central bank on Tuesday lowered its benchmark interest rate by 25 basis points to 3.25 percent, the lowest level since January 2023.
This marks the third consecutive cut in less than a year, following a nearly two-year period during which the benchmark rate remained unchanged at 4.5 percent.
In a statement, the bank cited moderating inflation, which has fallen below the midpoint of the government's 1 to 3 percent target range.
It also pointed to a rebound in economic activity, with gross domestic product (GDP) in the second quarter of 2026 up 6.2 percent from the fourth quarter of 2025 in annual terms, or 3.8 percent excluding production abroad by Israeli companies.
The bank said the figures partly reflected a recovery from disruptions caused by the war with Iran earlier in the year.
While geopolitical uncertainty remained high, the bank noted that Israel's risk premium was close to the levels before Oct. 7, 2023, and the exchange rate has remained largely stable.
