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ISRAEL: BoI Rate Decision Coming Up, Expected Unchanged

ISRAEL
EM BulletBulletEmerging Market NewsMiddle East

The Bank of Israel is widely expected to keep the base rate unchanged at 4.50% at the last monetary policy meeting this year, with the decision set to be announced at 14:00GMT/16:00IST. The central bank last cut interest rates by 25bps at the beginning of the year (January 1) and then pressed pause. As things stand, all economists polled by Bloomberg expect another on-hold decision today. Sell-side views in the image below.

  • Bank of New York say no change is expected in the BoI base rate as the central bank will need to manage the economic status quo without too strong a view on how matters may proceed over the coming quarters. They note that "if there is a window to begin easing policy, it will be clearly signalled."
  • Goldman Sachs say recent data has not supported additional tightening from the BoI. Still, they expect the Bank to remain hawkish in its communication and to continue to emphasise that rates will remain restrictive until inflation declines. Goldman continue to expect the next BoI move to be a cut but note that "we are some way from this point."
  • JP Morgan say the BoI is widely expected to remain on hold, however, its rhetoric will likely turn less hawkish. They note that the last two CPI reports were relatively benign, budget draft-2025 appears responsible while geopolitical outlook has improved following the US elections. They doubt there will be hints about near-term policy easing, but “some discussion about cuts later in 2025 appears likely”.

 

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The Bank of Israel is widely expected to keep the base rate unchanged at 4.50% at the last monetary policy meeting this year, with the decision set to be announced at 14:00GMT/16:00IST. The central bank last cut interest rates by 25bps at the beginning of the year (January 1) and then pressed pause. As things stand, all economists polled by Bloomberg expect another on-hold decision today. Sell-side views in the image below.

  • Bank of New York say no change is expected in the BoI base rate as the central bank will need to manage the economic status quo without too strong a view on how matters may proceed over the coming quarters. They note that "if there is a window to begin easing policy, it will be clearly signalled."
  • Goldman Sachs say recent data has not supported additional tightening from the BoI. Still, they expect the Bank to remain hawkish in its communication and to continue to emphasise that rates will remain restrictive until inflation declines. Goldman continue to expect the next BoI move to be a cut but note that "we are some way from this point."
  • JP Morgan say the BoI is widely expected to remain on hold, however, its rhetoric will likely turn less hawkish. They note that the last two CPI reports were relatively benign, budget draft-2025 appears responsible while geopolitical outlook has improved following the US elections. They doubt there will be hints about near-term policy easing, but “some discussion about cuts later in 2025 appears likely”.