The shekel has weakened against the US dollar in the wake of the Bank of Israel Monetary Committee's decision, announced yesterday afternoon, to leave the bank's key interest rate unchanged at 0.1%. The shekel-dollar rate is currently up 0.43% in comparison with yesterday's representative rate, at NIS 3.6335/$. Against the euro, the shekel is flat at NIS 4.2655/€. Leader Capital Markets macroeconomist Yonatan Katz writes that the central bank's interest rate decision was predictable, and stresses the projection in the economic forecast by the bank's Research Department (which receives the Monetary Committee's approval) that the interest rate will rise by 0.25% in the fourth quarter of 2018 and will reach 0.5% by the end of 2019. He notes that Governor of the Bank of Israel Karnit Flug emphasized in her press briefing after the interest rate announcement that the Monetary Committee would wait until inflation was well established within the 1-3% target range before raising interest rates. RELATED ARTICLES Bank of Israel leaves interest rate unchanged Foreign banks believed pressing for Israeli interest rate hike "We see the Bank of Israel's interest rate forecast and the press briefing as a 'dovish' message to the market. The Bank of Israel does not share the market's interest rate estimates as derived from the bond market and as prevalent among some forecasters," Katz writes. Published by Globes [online], Israel business news - www.globes-online.com - on July 10, 2018 © Copyright of Globes Publisher Itonut (1983) Ltd. 2018.
