Bank of Israel Governor Amir Yaron decided not to raise the interest rate, which will remain at 4.5%
This is the second time Yaron has decided not to raise interest rates since the outbreak of the war. Prior to October 7, interest rates had risen slowly for about a year.
Earlier this month, Yaron responded to Moody's decision to downgrade Israel's credit rating.
"The strength of the Israeli economy and the rapid recovery that it has demonstrated in recent months have also been reflected in the recovery and stability of the financial markets. To be noted that Israel experienced geopolitical crises during periods when debt/GDP ratios were much higher and there was never a delay in the government's debt repayments. In this regard, it is also important to remember the high growth potential of the economy and the structural surplus in its current account," Yaron said.
Yaron pointed out that "in order to strengthen the confidence of the markets and the rating companies in the Israeli economy, it is important for the government and Knesset to address the economic issues raised in the report. The Bank of Israel has already presented several courses of action in this regard, including the approval of the 2024 budget by the Knesset, with all the adjustments included therein.”
"The Israeli economy is founded on solid and healthy economic foundations, while being a global leader in innovation and technology. We knew how to recover from difficult times in the past and quickly return to prosperity, and the Israeli economy has the strength to ensure that this will be the case this time as well," Yaron concluded.