The Bank of Israel lowered its benchmark interest rate to 3.75% from 4%, as expected. This is the third cut in six months.
The central bank cited the shekel's appreciation and stable inflation. Annual inflation held at 1.9% in April, within the 1-3% target.
However, geopolitical uncertainty remains high. The U.S. and Israel launched airstrikes on Iran on February 28. An April 8 ceasefire holds but remains fragile.
The Bank of Israel's staff had forecast two rate cuts by early 2027 in March.
