Finance Minister Bezalel Smotrich on Monday slammed the Bank of Israel’s decision to cut interest rates by 0.25%, bringing the rate to 3.75%. Smotrich argued the move was too modest to address the Israeli economy’s current needs.
“The governor’s decision to lower the interest rate is too little, too late,” the finance minister said. “The Israeli economy needs a sharper interest rate cut. For our part as a government, we are managing the state budget responsibly and the impact on the markets is being felt clearly.” He added that the central bank governor should have cut rates “by a sharper amount to ease the burden on exporters, households and business owners.”
The decision was made by the Bank of Israel’s Monetary Committee, headed by Governor Amir Yaron, after months in which the rate remained at 4% amid security and economic uncertainty. The Bank of Israel explained that inflation continues to moderate and remains within the price target, with annual inflation standing at 1.9% in April.