The shekel has weakened against the dollar and euro in morning inter-bank trading today. The shekel-dollar exchange rate has risen 0.06%, compared with yesterday's representative rate, to NIS 3.561/$ and the shekel-euro exchange rate has risen 0.24% to NIS 4.815/€.
The Bank of Israel will announce the interest rate for December today. Most capital market analysts believe that it will keep the interest rate unchanged at 1%. Last month, the Bank of Israel kept the interest rate unchanged, after the Monetary Committee decided to reduce it by 25 basis points the month before.
The Bank of Israel said last month that it wanted to keep the inflation rate within the 12-month 1-3% target range, and to support growth through financial stability. However, the Bank of Israel faces the strengthening of the shekel against the dollar, and some analysts talk about an interest rate cut to weaken the shekel, taking into account the expected slowdown in growth and fall in exports.
In addition, the Consumer Price Index (CPI) unexpectedly rose by 0.3% in October, resulting in 1.8% inflation over the preceding 12 months, but this is still below the midpoint of government target - which gives the Bank of Israel enough leeway to lower the interest rate, should it decide that this is necessary.
In international markets, the dollar is strengthening against leading currencies. The dollar has strengthened 0.15% against the euro to $1.354/€, it has strengthened 0.1% against the pound to $1.6218/£, and it has strengthened by 0.6% against the yen to $101.88/¥.
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2013
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