The Bank of Israel’s Monetary Committee kept its policy rate at 4.00 percent on 30 March 2026, judging the current stance adequate as the inflation environment has firmed on the back of a sharp rise in global energy prices and persistent geopolitical uncertainty linked to Operation “Roaring Lion.” After cutting the rate by a cumulative 50 bp since November 2025, when it stood at 4.50 percent, policymakers now see headline CPI edging up to 2.0 percent year on year in February—within the 1–3 percent target range—while core inflation is 2.2 percent and forecasters have lifted near-term projections by about 0.5 ppt. The Research Department, assuming the conflict ends by late April, trimmed its 2026 GDP growth forecast to 3.8 percent (from 5.2 percent) but raised 2027 growth to 5.5 percent; it also foresees a budget deficit of 5.3 percent of GDP this year and public debt near 70.5 percent of GDP. The labour market remains tight, with business-sector wages up 4.7 percent y/y in November–January. Externally, the shekel slipped 0.8 percent against the USD but gained 0.5 percent on a nominal effective basis, while Israel’s risk premium nudged higher. Brent crude has surged about 60 percent to USD 113 per barrel and European gas prices are up 70 percent, underscoring the global inflation impulse. The committee reiterated that the future rate path will depend on inflation trends, economic activity, geopolitical developments and fiscal outcomes, noting that risks to price stability are t
Bank of Israel 2026-03-30
Bank of Israel keeps policy rate unchanged at 4.00 % (30 March 2026)
Bank of Israel’s Monetary Committee kept the policy rate at 4.00 % on 30 March, pausing after 50 bp of cuts since November 2025, citing energy-led price pressures that lifted headline CPI to 2 % and core inflation to 2.2 % amid ongoing Operation “Roaring Lion.” The Research Department cut its 2026 growth forecast to 3.8 % and projects a 5.3 %-of-GDP deficit, while the committee signalled that future moves will depend on inflation, activity, geopolitics and fiscal trends, with price-stability risks tilted upward.