The latest rate cut follows six earlier cuts in the current cycle which started in November 2006. In spite of this monetary easing, the consumer price index (CPI) has fallen by 1.3% in the last 12 months. The central bank added that the average prediction of inflation for the next twelve months by Israeli forecast
The Bank of Israel has cut interest rates by 25 basis points to 3.5%. The decision, announced on 28 May, comes as inflation remains below the central bank's 1 to 3% inflation target.