Bank of Israel Cuts Interest Rates as Shekel Surges to 33-Year High

by | May 25, 2026 | News

green plant in clear glass cup

The Bank of Israel lowered its benchmark interest rate from 4% to 3.75% on Monday, marking the second cut of the year, as the shekel climbed to a 33-year high of approximately 2.89 per dollar. The central bank cited moderating inflation and growing optimism over a potential end to the war with Iran. Annual inflation held steady in April at 1.9%, well within the government’s 1%–3% target range. Officials acknowledged ongoing geopolitical uncertainty but noted that recent data point to economic recovery following the war’s impact on activity.

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