Bank of Israel​

In the second quarter of 2026, the shekel strengthened by approximately 5.9 percent against the US dollar and by about 6.6 percent against the euro. In addition, the shekel strengthened by about 6.1 percent against the currencies of Israel's main trading partners, in terms of the nominal effective exchange rate

Inflation expectations derived from the capital market are defined as the ratio between the yields on unindexed government bonds and the yields on CPI-indexed government bonds (breakeven inflation).

The first half of the year featured continued geopolitical uncertainty. Annual inflation declined, in contrast with the global trend, and stabilized around the midpoint of the target range, and the unemployment rate remained low except for a temporary increase during Operation Roaring Lion (the military confrontation with Iran that began on February 28, 2026).

The monthly Index of Economic Activity increased by 2.5 percent in June. The Index this month reflects the average monthly growth estimate for the three months from April to June.

Bank of Israel Governor Prof. Amir Yaron and the members of the Monetary Committee held their quarterly meeting today with the group of forecasters who regularly provide the Bank of Israel with projections for inflation, the interest rate, and the exchange rate.