The Bank of Israel’s foreign currency reserves shrank by $120 million, or 0.3%, in March 2006 to $27.89 billion. The Bank of Israel said, “The decline was due mainly to government withdrawals from its accounts with the Bank of Israel to finance its activities abroad, and was partly offset by the Bank's income from the investment of the reserves.”
Israel’s foreign currency reserves fell by 0.7%, or $201 million, in February-March, and by 1.8%, or $510 million, since October 2005.
Despite last month’s elections, foreign currency trading declined to $51.6 billion in March, 0.3%, or $1.8 billion, less than the $53.4 billion traded in February. The entire drop was by foreign financial institutions; they traded $27 billion in March, down 9.9%, or $2.7 billion, compared with February. Daily foreign currency trading averaged $2.46 billion in March, including a daily average of $1.07 billion in spot trades.
The shekel-dollar exchange rate fell 0.87% in March; the exchange rate ranged between NIS 4.6537/$ and NIS 4.7218/$. The shekel depreciated 1.35% against the dollar in the first quarter of 2006, and by 8.32% over the preceding 12-month period.
The shekel-basket of currencies exchange rate fell 0.44% in March; the exchange rate ranged between NIS 5.1829 and NIS 5.226. The shekel depreciated 2.03% against the basket of currencies in the first quarter of 2006, and by 4.66% over the preceding 12-month period.
The Consumer Price Index (CPI) for March is expected to be low. Analysts predict a rise of 0-0.2%. However, the CPI for April is expected to rise by 0.5-1%, due to a renewed jump in fuel prices and a rise in food prices for Passover.
Published by Globes [online], Israel business news - www.globes.co.il - on April 4, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006