Bank of Israel warns political turmoil could hit GDP

Central bank slows cycle with 25bp hike, raising key rate to 4.5%

The Bank of Israel
Photo: David Vaaknin

The Bank of Israel raised its key rate by 25 basis points on April 3, slowing a year-long cycle of policy tightening. Its policy statement warned that continued unrest driven by opposition to the government’s controversial judiciary law could damage economic growth.

The decision brings the rate to 4.5%, up from 0.1% when the cycle began last April. The hike was smaller than most of the previous decisions, which were primarily in 50bp or 75bp increments.

The move comes a week after Israeli

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