The Bank of Israel unexpectedly ‍cut its ‍short-term interest rate ​by 25 basis points on Monday, a ⁠second successive cut after lowering it ⁠in November for ‌the first time in nearly two years.

The central ⁠bank's benchmark rate was reduced to 4.00% from 4.25%.

Annual Israeli inflation eased to a ⁠rate of 2.4% ​in November, within the government's 1-3% target range.

Supply ‍constraints had stoked inflation during the ​two year war in Gaza that ended with a U.S.-brokered ceasefire in October 2025.

Despite easing price pressures and a four-year high for the shekel versus the dollar, nine of the 10 economists polled by ⁠Reuters had forecast the ‌central bank would hold rates this month, while one ‌economist ⁠expected a quarter-point reduction.

(Reporting by Steven Scheer; ⁠Editing by Toby Chopra)