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Israel: nearing the end of the tightening cycle

Israel’s central bank raised its policy rate by a smaller 25bp, to 4.50%, as expected today and its communications sounded slightly less hawkish than at its previous meeting. Inflation pressures are likely to remain strong this year, but the door for further tightening appears to be closing and we think there will be just one more 25bp interest rate hike in this cycle.

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