The central bank of Israel left its benchmark interest rate steady at 0.25 percent on February 25th, in line with market expectations, saying inflation rate is near the lower bound of the target range of 1 to 3 percent. In January, annual inflation rate rose to 1.2 percent from 0.8 percent in the previous month and slightly higher than forecasts of 1 percent. Inflation is still expected to remain within the lower bound of the target in 2019 while medium and long-term expectations increased slightly toward the midpoint of the target. Policymakers added main risks to both growth and inflation rates include the slowdown in Europe, an escalation of the trade war, and Brexit; and that the rising path of the interest rate in the future will be gradual and cautious. Interest Rate in Israel averaged 5.54 percent from 1996 until 2019, reaching an all time high of 17 percent in June of 1996 and a record low of 0.10 percent in March of 2015.
Interest Rate in Israel is expected to be 0.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Israel to stand at 0.50 in 12 months time. In the long-term, the Israel Interest Rate is projected to trend around 1.00 percent in 2020, according to our econometric models.