Time to revisit rate playbook in Israel with price declines near

After voting narrowly in favor of a hold in October, the balance on the monetary committee has shifted in favor of buying foreign currency as a way to loosen policy.

An interest-rate cut may be back in play for the Bank of Israel as its policies appear increasingly in flux. With the country’s first bout of falling consumer prices in almost three years on the horizon, the central bank might be forced to adjust a policy blend that’s failed to nudge Israel’s inflation higher over the past year. Goldman Sachs Group Inc. predicts Israel’s first rate cut since 2015 could come already on Monday.

To hold the line against an appreciating shekel, the central bank has preferred to intervene in the currency market over cutting borrowing costs. But despite its