Jerusalem, Jan 2 (IANS): Amid the ongoing Israel-Hamas war, the country's central bank announced its decision to lower the benchmark interest rate by 0.25 percentage points to the new rate of 4.5 per cent.

"In view of the war, the Monetary Committee's policy is focusing on stabilising the markets and reducing uncertainty, alongside price stability and supporting economic activity," Xinhua news agency quoted the Bank of Israel as saying in an official statement.

Meanwhile, the bank said that the pace of inflation saw a continuous decline recently, and that the rate of inflation is moderating based on an analysis of the inflation dynamic monitored on a quarterly and semiannual basis.

It added that inflation is predicted by a number of sources to reach the government's target range of 1-3 per cent in the first quarter of this year.

Regarding the next interest rate decision, which is scheduled for February 26, the bank stated that the rate will be determined in accordance with the continued convergence of inflation to its target, financial market stability, economic activity, and fiscal policy.