Tel Aviv, Nov. 25 -- After nearly two years, the Bank of Israel lowered its interest rate, cutting it by a quarter of a percentage point to 4.25 per cent on Monday. This marks the first reduction since January 2024, ending a stretch of 14 consecutive decisions in which the rate remained unchanged at 4.5 per cent.

The Monetary Committee, led by Governor Professor Amir Yaron, made the decision amid months of inflation running below the target range and ongoing political pressure.

Inflation currently stands at 2.5 per cent, comfortably within the Bank's 1 per cent-3 per cent target, and has remained below the centre of that range for several months. An initial cut had long been expected.

The reduction is expected to directly impact famili...