The central bank of Israel left its benchmark interest rate steady at 0.25 percent on August 28th, in line with market expectations after inflation rate fell to 0.5 percent, the lowest since May of 2018 and below the government's 1-3 percent target. Policymakers forecast annual inflation rate to decline further in the coming months. The central bank added that the interest rate will not be increased for an extended period, and if necessary it will make monetary policy more accommodative in order to stabilize inflation around the target. Interest Rate in Israel averaged 5.46 percent from 1996 until 2019, reaching an all time high of 17 percent in June of 1996 and a record low of 0.10 percent in March of 2015.
Interest Rate in Israel is expected to be 0.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Israel to stand at 0.25 in 12 months time. In the long-term, the Israel Interest Rate is projected to trend around 0.50 percent in 2020, according to our econometric models.