The Bank of Israel building is seen in Jerusalem, June 16, 2020. Photo: REUTERS/Ronen Zvulun

The Bank of Israel cut interest rates by a quarter-point on Monday, its first reduction in nearly two years, citing a moderation in inflation following the ceasefire in Gaza while expressing caution over the prospect of future cuts.

The cut in the benchmark rate to 4.25% from 4.5%, widely expected by analysts and financial markets, came after other global central banks had already begun to ease monetary policy and last month’s US-brokered truce between Israel and Palestinian terrorist group Hamas took hold.

“The Monetary Committee’s policy is focusing on price stability, support for economic activity, and stability of the markets,” the central bank said in a statement.

“The interest rate path will be determined in accordance with the development of inflation, economic activity, geopolitical uncertainty, and fiscal developments,” it said.

The committee lowered the key rate by a quarter-point in January 2024 at the outset of the Gaza war but has taken a conservative stance since then, opting for caution during the two-year conflict while price pressures rose, largely due to supply constraints.

But Israel‘s inflation rate has eased, and held steady at 2.5% in October to stay within an official 1-3% annual target range.

The central bank acknowledged inflation has moderated in the past two months but that “forecasters project that there will be some increase in inflation at the end of the year, and that it will then decline and stabilize around the midpoint of the target range.”

It added that the labor market remains tight and wage pressures continue to rise while home prices are declining.

At the same time, the Bank of Israel pointed to a sharp rebound in economic activity in the third quarter, gaining an annualized 12.4%, but that “its level remains lower than its long-term trend.”

Since the prior rates decision in late September, the shekel also has appreciated versus the dollar, euro and other trading partners.

“The data from recent months have … created a clear need for a cut,” said Ron Tomer, president of the Manufacturers’ Association.

“The Bank of Israel’s decision to lower the interest rate is a responsible step that helps curb the appreciation and restore competitiveness to the economy,” said Tomer, who called on the bank to cut again before its next meeting in early January.

The Oct. 10 ceasefire in the two-year Gaza war has eased the conflict and, although looking increasingly fragile, has for now reduced geopolitical risk and eased price pressures.

“Today’s interest rate cut joins a series of steps and clear signs — Israel is on the path to tremendous economic growth,” said finance minister Bezalel Smotrich.

An employee pours a draft non-alcoholic beer at the A12 cafe in Riyadh, Saudi Arabia, Nov. 24, 2025. Photo: REUTERS/Staff

Saudi Arabia plans to open two new alcohol stores, including one serving non-Muslim, foreign staff at state oil giant Aramco, as the kingdom further eases restrictions, according to people briefed on the plans.

The launch of outlets in the eastern province of Dhahran and one for diplomats in the port city of Jeddah would be a further milestone in efforts, led by de facto ruler Crown Prince Mohammed bin Salman, to open up the country.

The kingdom, which is the birthplace of Islam, last year opened an alcohol store serving non-Muslim diplomats in the capital Riyadh – the first such outlet since a ban was brought in 73 years ago.

STORE PLANNED IN ARAMCO COMPOUND, SAYS SOURCE

The new store in Dhahran will be set up in a compound owned by Aramco, one of the three people who talked to Reuters said.

That store would be open for non-Muslims working for Aramco, added the source, who said Saudi authorities had informed them of the plan.

Two of the sources said a third liquor store was also in the works for non-Muslim diplomats in the city of Jeddah, where many foreign countries have consuls.

Both stores were expected to open in 2026, but no timelines had been released, two of the sources said.

The government media office did not immediately reply to questions over the plans for the stores in both locations, which were previously unreported. Aramco declined to comment.

There was no officially announced change made to regulations after the opening of the Riyadh store in a nondescript building in the diplomatic quarter known to some diplomats as the “booze bunker.”

The Riyadh store’s customer base was recently expanded to include non-Muslim Saudi Premium Residency holders, two of the sources said. Premium residencies have been awarded to entrepreneurs, major investors and those with special talents.

Before the Riyadh store, alcohol was largely only available through diplomatic mail, the black market or home brewing.

In other Gulf countries, apart from Kuwait, alcohol is available with some restrictions.

REFORMS COVER EVENTS, WOMEN’S DRIVING

While alcoholic drinks are still off limits for the vast majority of the population, under bin Salman’s reforms both Saudis and foreigners can now take part in once unthinkable activities from dancing at desert raves to going to the cinema.

Other reforms have included allowing women to drive in 2017, easing rules on the segregation of men and women in public spaces, and significantly reducing the power of the religious police.

The kingdom has been easing restrictions to lure tourists and international businesses as part of an ambitious plan to diversify its economy and make itself less dependent on oil.

In May a media report, picked up by some international media after appearing on a wine blog, said Saudi authorities had planned to allow alcohol sales in tourist settings as the country prepares to host the 2034 soccer World Cup.

The report, which was denied at the time by a Saudi official, did not give a source for the information.

That report had sparked a vigorous online debate in the kingdom, whose king also holds the title of Custodian of the Two Holy Mosques – Islam’s most revered places in Mecca and Medina.

Social liberalization has proceeded at a breakneck pace but the leadership has taken a more gradual and cautious approach on the question of alcohol.

Saudi Arabia has been aggressively expanding its local tourism portfolio with the giant Red Sea Global development, which includes plans to open 17 new hotels by next May.

These ultra-luxury resorts remain dry.

Asked by Reuters this month if there were any plans to ease restrictions on alcohol to help attract foreign visitors, Saudi Tourism Minister Ahmed Al-Khateeb said: “We do understand that some of the international travelers want to enjoy alcohol when they visit the Saudi destinations but nothing has changed yet.”

Pressed on whether “yet” meant that could soon change, he said: “I will leave it to you on how to elaborate on it.”

Visitors tour an exhibition, ahead of Israel’s national Holocaust memorial day at Yad Vashem, the World Holocaust Remembrance Center, in Jerusalem, April 23, 2025. Photo: REUTERS/Ronen Zvulun

Poland summoned Israel’s ambassador on Monday over a tweet from a Holocaust memorial institute that Warsaw said did not make clear that occupying Nazi German forces, and not Polish authorities, made Jews wear star badges during World War II.

Foreign Minister Radoslaw Sikorski was protesting against a social media post in which Yad Vashem, Israel’s memorial institution to the victims of the Holocaust, wrote that Poland was the first country where Jews were forced to wear “a distinctive badge to isolate them from the surrounding population.”

He said the post, published on Sunday, should have made clear Poland was “German-occupied” at the time.

“Since the misleading post has not been amended, I have decided to summon the ambassador of Israel to the foreign ministry,” Sikorski wrote on X.

The Israeli foreign ministry did not immediately respond to a request for comment.

Yad Vashem had reposted the original tweet saying: “As noted by many users and specified explicitly in the linked article, it was done by order of the German authorities.”

Poland was occupied by Nazi Germany and the Soviet Union during World War II, which lasted from 1939 to 1945. Warsaw takes pains to underline that the persecution of Jews on its territory, such as in the Auschwitz-Birkenau concentration camp, was the work of the Nazi German occupiers.

More than three million of Poland‘s 3.2 million Jews were killed by Nazi Germany, accounting for about half of the Jews in Europe killed during the Holocaust.

“Yad Vashem presents the historical realities of Nazism and WW2, including countries under German occupation, control or influence. Poland was indeed under German occupation,” Dani Dayan, the chairman of Yad Vashem, wrote on X on Monday.

“This is clearly reflected in our material. Any other interpretation misreads our commitment to accuracy.”