In the foreign currency market, options point to a strengthening of the shekel with a 0.19% drop in the shekel-dollar exchange rate, compared with yesterday's representative rate, to NIS 3.481/$, and a 0.08% rise in the shekel-euro exchange rate NIS 4.774/€.
Yesterday the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.488, down 0.428% on Monday's rate, and the shekel-euro representative exchange rate at NIS 4.77/€, down 0.559%. The Bank of Israel will not set a representative rate today due to the Christmas holiday overseas.
Foreign currency traders say that the shekel has been strengthened over the past few days by the Bank of Israel's comments in leaving the interest rate unchanged at 1% for January. The Bank of Israel said, "From a longer term perspective, after marked appreciation in the first half of the year, there has not been a trend of change in the effective exchange rate in recent months."
Traders see this sentence as the bank's ignoring the appreciation of the shekel. One senior trader told "Globes," "I simply don't understand them. Everybody is talking about that sentence. What is the Bank of Israel trying to do? Do they really not understand the market."
Traders interpret the Bank of Israel's comment as showing that the central bank is not concerned enough about the foreign currency exchange rate to take aggressive steps on the matter.
Published by Globes [online], Israel business news - www.globes-online.com - on December 25, 2013
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