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2026-05-25 21:57:14
[Deputy Governor of the Bank of Israel: Monday's Rate Cut Mainly Due to Inflation Being Controlled at Around 2%, Shekel Appreciation Provides Policy Space] ⑴ Deputy Governor of the Bank of Israel, Abir, told institutions on Monday that the main reason for Monday's rate cut was that inflation was controlled at around 2%, and the appreciation of the shekel helped to curb inflation and provided room for further rate cuts. ⑵ He pointed out that the level of geopolitical uncertainty has decreased but not disappeared, and future rate cuts will depend on data; geopolitical uncertainty requires a gradual pace of rate cuts. ⑶ The Deputy Governor also emphasized that the monetary tightening policy has successfully suppressed inflation but has not led to an increase in the unemployment rate. (4) From a trading psychology perspective, this statement released several key signals: First, the Bank of Israel is relatively optimistic about the current inflation trend, believing that a 2% level is acceptable; second, the shekel's 33-year high against the US dollar has become a "buffer" for the central bank's monetary policy; third, the policymakers tend to adopt a "gradual" interest rate cut path rather than a sudden stop or a sharp turn, indicating that even if regional conflicts continue, as long as inflation data does not unexpectedly rebound, the Bank of Israel will continue to loosen monetary policy in a restrained manner within the current cycle.
