Financial analysts say they were "shocked" that Bank of Israel Governor Stanley Fischer slashed commercial interest rates by half a percentage point, to 3.25. The move, the second reduction this year, was intended to maintain Israel's economic growth vigorous despite a sinking US dollar and signs that a worldwide recession could be beginning.

Analysts said they expected Fischer to cut interest rates, but the move went farther than expected. Fischer has also been proactive in trying to stem the dollar's slide against the shekel by ordering the purchase of millions of dollars.

The shekel-dollar exchange rate is currently the lowest it has been in more than in more than a decade. One US dollar is currently worth NIS 3.48.