Globes: Israel Bank's Decision to Lower Interest Rates Opens the Door to a Cycle of Easing Policy

SadaNews Economic Translation - The economic newspaper Globes reported that the essence of the Israel Bank's decision to lower interest rates today is that it opens the door to a cycle of interest rate reductions, but it will closely monitor the market's reaction.

The newspaper stated, according to SadaNews translation, "If the interest rate cut leads to a sharp decline in the value of the shekel or a sudden rise in subsequent price indicators, the bank will not hesitate to reinstate the easing policy again."

In its analysis of the bank's decision, the Calcalist newspaper said: "Alongside the slowdown in inflation, the central bank has also been affected by the rise in the value of the shekel, which has led—and is expected to lead—to a slowdown in inflation."

The report added, "On the other hand, this rapid rise in the value of the shekel makes it difficult for exporters and may even harm the advanced technology sector in Israel."

It continued, "Moreover, the slowdown in activity in the real estate sector and the lack of indicators for strong growth later this year may have pushed the bank to prioritize economic growth over inflation, which now seems to be under control."

It clarified that the main factor likely influencing the central bank's decision to lower interest rates is the proximity to reaching an agreement between the United States and Iran, noting that although this agreement is not favorable to the Israelis, it is expected to contribute to stabilizing energy prices again and removing one of the significant inflation risk factors.