Bank of Israel holds rate amid uncertainty over war

Governor notes falling inflation but says proposed military spending could fuel pressures

The Bank of Israel
Photo: David Vaaknin

The Bank of Israel’s monetary policy committee held its key rate on February 26, as the country’s parliament considers plans to almost double military spending.

The six-member committee held the interest rate at 4.5%, having cut it by 25 basis points at its last meeting in December. Governor Amir Yaron said some economic indicators were acting “in opposite directions”, and that uncertainty over Israel’s war in Gaza was complicating policy-makers’ decisions.

Inflation fell to 2.6% year on year in

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