The Bank of Israel held its benchmark interest rate at 4.50% at its monetary policy meeting on 8 April 2024, maintaining the current stance as the central bank continued to navigate the economic and financial consequences of the conflict that began in October 2023.
Israel's economy has been subjected to simultaneous shocks stemming from the conflict, including disrupted output across affected parts of the country, a substantial increase in defence expenditure and a significant widening of the fiscal deficit, and heavy pressure on the shekel in the first weeks of the war.
THE SHEKEL AND THE WAR
The shekel came under heavy pressure at the start of the conflict before recovering. At the start of the war the Bank of Israel announced a programme to sell up to USD 30 billion of foreign currency to provide liquidity and limit disorderly price movements.