The Bank of Israel has decided to keep short-term interest rates unchanged for the ninth consecutive meeting, citing a temporary rise in inflation and ongoing economic recovery. The central bank is focusing on stabilizing the markets and reducing uncertainty amid the conflict in Gaza. The interest rate path will be determined by inflation convergence, stability in financial markets, economic activity, and fiscal policy. Despite a previous rate cut in January, the bank is in no hurry to ease again while inflation remains above target. The annual inflation rate in January reached its highest level since September 2023 at 3.8%.