The Bank of Israel's Monetary Committee announced a 0.25% cut in Israel's main interest rate for July, setting it at 2.25%.
The Bank also released its updated market growth forecast, setting Israel's projected GDP at 3.1% for 2012 and 3.4% for 2013.
The Bank further predicts an inflation rate of 2.4% over the next 12 months, with the key interest rate remaining at 2.25%.
In its statement, the Bank of Israel explained the decision citing "Continued moderate GDP growth at around 3% a year and global economic slowdown."
"Following the May CPI, actual inflation over the previous 12 months is below the center of the inflation target range, and inflationary pressures are not felt," the bank stated.
"Most indicators of real economic activity in Israel, which became available this month, point to continued moderate growth at an annual rate of 3%, a rate similar to that of the first quarter. After the reduction in the interest rate for July, the Research Department staff forecast for GDP growth in 2012 remains 3.1% and the forecast for 2013 was revised to 3.4%."