The markets were buzzing in Tel Aviv this afternoon, after the Bank of Israel Monetary Committee's unexpected decision to lower the March interest rate by 0.15% from 0.25% to another historic low of 0.1%.
The shekel reacted swiftly by weakening sharply against both the dollar and euro. The shekel-dollar exchange rate is up 1.14% in comparison with the representative rate set earlier this afternoon, at NIS 3.9021/$, and the shekel-euro rate is up 1.28%, at NIS 4.4165/€.
The Bank of Israel has said in its rate cut decision that, "Continued appreciation (of the shekel) is liable to weigh on growth in the tradable industries - exports and import substitutes."
The Tel Aviv Stock Exchange, already trading at record levels, also responded. The Tel Aviv 25 Index rose 0.44% to 1,502.05 points, crossing the 1,500 point threshold for the first time ever.
Published by Globes [online], Israel business news - www.globes-online.com - on February 23, 2015
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