Shekel weakens after BoI rate call

Shekel-dollar ASAP Creative

The Bank of Israel said it does not plan an interest rate hike until the end of 2018.

The shekel is weakening today against the dollar and against the euro. In morning inter-bank trading, the shekel-dollar exchange rate is up 0.59% against the dollar at NIS 3.524/$ and up 1% against the euro at 4.373/€.

Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.086% from Friday's rate at NIS 3.5030/$ and set the shekel-euro rate up 0.081% at 4.3296/€.

The shekel is weaker today after the Bank of Israel reiterated that there will be no interest rate hike until the final quarter of 2018 in its decision yesterday to keep the rate unchanged at its historic low of 0.1%. On Sunday, the Central Bureau of Statistics announced that the Consumer Price Index (CPI) for March rose 0.3% and that inflation over the past 12 months is just 0.2%, well below the government target of between 1% and 3%.

Many market sources are skeptical that the Bank of Israel will be able to raise rates even this year due to the low inflation data. With the US Fed planning more rate hikes this year, the interest rate between the shekel and dollar will only widen, thus likely further weakening the Israeli currency.

Published by Globes [online], Israel business news - www.globes-online.com - on April 17, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Shekel-dollar ASAP Creative
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