The Bank of Israel kept interest rates unchanged on Wednesday for the sixth straight meeting, staying cautious as Israel’s year-long war with Hamas in Gaza and fighting with Hezbollah in Lebanon accelerates inflation and weakens economic activity.
The central bank - also worried about Israel’s investor risk premium which has risen since the war began on Oct. 7, 2023 - left its benchmark rate at 4.50 percent.
“In view of the continuing war, the Monetary Committee’s policy is focusing on stabilizing the markets and reducing uncertainty, alongside price stability and supporting economic activity,” the central bank said in a statement.