The shekel is weakening today against the dollar and against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate is up 0.53% against the dollar at NIS 3.583/$ and up 0.19% against the euro at 4.179/€.
On Friday, the Bank of Israel set the shekel-dollar representative rate down 0.308% at NIS 3.564/$ from Thursday's rate and set the shekel-euro rate up 0.327% at 4.171/€.
After gaining some 3% against the dollar over the past month and trading at its strongest since June, the shekel is losing ground today. On Friday, the Central Bureau of Statistics reported that the August Consumer Price Index (CPI) rose only 0.1%, less than predicted. This was the second successive month that inflation in Israel fell below the economic experts' forecasts and with annual inflation slipping to 1.2%, at the lower end of the government's 1%-3% annual target, the much anticipated interest rate hike could be postponed until early next year.
The Bank of Israel has kept interest at its historic low of 0.1% since March 2015. With the US Federal Reserve expected to announce two more interest rate hikes this year, the gap between shekel and dollar interest is widening.
Published by Globes [online], Israel business news - www.globes-online.com - on September 17, 2018
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