Analysts estimate: Despite the good data – the interest rate will not drop tomorrow

Analysts estimate that the Bank of Israel will not lower the interest rate tomorrow, despite positive inflation data. The September index fell by 0.5%, exceeding expectations. However, interest rate gaps with the US, seasonal factors, and the upcoming elections are seen as reasons to wait.

Analysts estimate that the Bank of Israel will not lower the interest rate tomorrow (Wednesday), despite the surprisingly positive inflation data published last week. The Consumer Price Index for September fell by 0.5%, exceeding market expectations of a 0.3% decline. The annual inflation rate stands at 1.6%, lower than the forecast of 1.8%. However, most analysts believe the bank will adopt a passive approach. Tel Aviv Stock Exchange economist Nisan Avraham explains that the index decline reflects seasonal and temporary factors, not a trend change. Additionally, interest rate gaps with the US could put pressure on the shekel and increase inflation. Another consideration is the sensitive timing, six days before the elections, where an interest rate cut could be perceived as a political move. The tensions with Iran also reinforce the assessment that the Bank of Israel will prefer to wait.

Analysts estimate: Despite the good data – the interest rate will not drop tomorrow