Currency policy shrouded by the clouds of war; Bank of Israel expected to hold rates steady

Golden Ten Data reported on March 30 that due to escalating global and domestic inflation concerns caused by intensified strikes from Israel and the US against Iran, the Bank of Israel is expected to keep its benchmark interest rate unchanged at 4% for the second consecutive time. Alongside the interest rate decision, the Bank of Israel will also release an updated macroeconomic forecast for the first time since the outbreak of conflict on February 28, followed by a press conference held by Governor Amir at 4:15 p.m. local time. Over the weekend, Fitch Ratings maintained Israel’s 'A' sovereign rating with a negative outlook. The agency believes that due to "military spending exceeding government forecasts," this year’s fiscal deficit will swell to 5.7% of GDP from 4.7% in 2025.