Bank of Israel's decision not to lower the interest rate may have disappointed the public. But it was necessary in light of the uncertainty regarding the fighting in the south and the north and the government's inability to prevent price increases.
The interest rate path in Israel will be determined according to the continued convergence of the following factors; inflation, the stability in the financial markets, the economic activity and the budgetary policy of the government. The Bank of Israel says that the "Iron Swords" war has significant consequences for the real activity in the economy.