Shekel slides following poor growth figures

Shekels Photo: Shutterstock

Disappointing growth figures for the first quarter have seen the shekel weakening this afternoon.

The shekel is weakening against the dollar and against the euro today. In afternoon inter-bank trading, the shekel-dollar exchange rate was up 0.21% from yesterday's representative rate at NIS 3.606/$ and up 1.01% against the euro at 3.985/€.

Yesterday, Bank of Israel set the shekel-dollar representative rate down 0.332% from Friday's rate at NIS 3.598/$, and the representative shekel-euro rate was set up 0.589% at NIS 3.945/€.

The shekel has been slipping this afternoon after the Central Bureau of Statistics published its initial estimate that the economy grew at just 1.4% in the first quarter of 2017. The Bank of Israel and others had expected much stronger growth of around 3.7%.

Yesterday, the Bank of Israel purchased several hundred million dollars in foreign currency when the exchange rate fell below NIS 3.60/$, as has been its habit in recent months. The measure worked only for a few hours and this morning the rate was again below NIS 3.60/$ before slipping when the growth figures were announced. The Bank of Israel's foreign currency reserves reached a record $105 billion at the end of April.

Yesterday the Central Bureau of Statistics reported that the Consumer Price Index rose by 0.2% in April. Inflation is running at 0.7% over the past 12 months. The Central Bureau of Statistics also reported that home prices fell by 2.9% in the first quarter of 2017.

Published by Globes [online], Israel business news - www.globes-online.com - on May 16, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Shekels Photo: Shutterstock
Shekels Photo: Shutterstock
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