Bank of Israel Governor Stanley Fischer. Photo: World Economic Forum.

Bank of Israel Governor Stanley Fischer made a surprise announcement on Monday that the central bank would cut the base interest rate by 0.25 percent to 1.5 percent. The modified interest rate goes into effect on Friday, two weeks before the original due date, to help stimulate export growth and encourage investment as the shekel continues to rise against the dollar. The dollar bounced back 1.5 percent to 3.6 shekels with Fischer’s announcement.

The last time Fischer cut interest rates ahead of schedule was just after the collapse of the Lehman Brothers investment bank, which helped precipitate the global economic crisis in 2008.

The Bank of Israel said the reduction was outside its normal framework and that it would not rule out a second cut to interest rates this month on the scheduled date, May 27.