Bank of Israel leaves rates unchanged

Bank of Israel kept interest rates unchanged at 4.5 per cent, as concerns of rising inflation loam around amid the ongoing illegal Israeli war on Gaza, Bloomberg reported on Tuesday.

The move surprised economists who were expecting a quarter-point reduction.

Governor Amir Yaron emphasised a cautious approach due to uncertainty from the ongoing war against Gaza.

Moreover, the central bank maintains a bias towards easing but acknowledges the need for responsible fiscal policy amid market volatility.

While the Israeli economy is facing an uncertain future amid ongoing atrocities Israel is committing against the Palestinians in Gaza, recent contraction, and government spending, there’s room for further stimulus, with projections suggesting potential rate cuts in 2024, according to Bloomberg.

The war against Gaza entered its 142nd day, with the death toll reaching about 30,000 Palestinians, two-thirds of whom are women and children.