According to Mars Finance, as the US and Iran move closer to a ceasefire agreement, the likelihood of the Israeli central bank cutting interest rates has increased. Among 14 economists, 8 predict a 25 basis point cut to 3.75%. The shekel against the US dollar is nearing a 30-year high, and inflation expectations over the next 12 months are set to fall to 1.8%. If the geopolitical situation does not escalate, the odds of a rate cut are relatively high, and economic growth will continue to rebound slowly after the war.

MarsBitNews

2026-05-25 05:35:44

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Mars Finance News, May 25th, as the United States and Iran seem to be gradually approaching an agreement to end the war, the Bank of Israel is expected to cut interest rates. According to a survey of 14 economists, 8 of them expect the Bank of Israel to lower the benchmark interest rate by 25 basis points to 3.75% on Monday. IBI Investment Company's Chief Economist Rafael Gozlan stated: "From the central bank's perspective, inflation remains stable near the midpoint of the target range (1.9%), and the significant appreciation of the shekel supports a slight rate cut. The next decision will depend on geopolitical developments. If there are no major escalations, we expect a rate cut; if the situation worsens, rates may remain unchanged." The shekel closed last Friday at 2.9 shekels per US dollar, maintaining its strongest level in over thirty years, further reinforcing market expectations of moderate inflation in the future. According to a survey released by the Bank of Israel on May 19th, the average inflation expectation for the next 12 months has decreased from 2.3% to 1.8%. Since the last interest rate decision by the Monetary Policy Committee at the end of March, the shekel has appreciated by 8%, with a total appreciation of nearly 24% over the past year. Other factors supporting a rate cut include Israel's slow economic recovery from the war with Iran; even if an agreement is reached, economic growth is not expected to accelerate significantly.

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NftClosetGhost

· 14h ago

A easing of geopolitical tensions and central banks relaxing their policies, but can 3.75% really revive the economy?

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MechanicalHummingbird

· 05-25 05:57

If the Israeli Central Bank actually cuts rates this time, will neighboring countries follow suit?

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GateUser-ffe7bee5

· 05-25 05:46

An 1.8% inflation expectation, close to the lower bound of the target range, indeed leaves room for interest rate cuts.

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Don’tLetTheLiquidationAlarm

· 05-25 05:42

A slow recovery after the war, this wording sounds quite cautious.

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ChecksumSmile

· 05-25 05:39

Is the peace agreement still uncertain to be implemented, and is it a bit early to cut interest rates now?

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BridgeBurner

· 05-25 05:39

The expectation of interest rate cuts has finally arrived, Shekel's movement is too fierce.

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The prospects of the Iran-U.S. agreement are heating up, and the Israeli central bank is expected to restart interest rate cuts.

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