Shekel gains against dollar despite political uncertainty

Shekel Photo: ASAP Creative
Shekel Photo: ASAP Creative

Leader Capital Markets macroeconomist Yonatan Katz expects that the Bank of Israel's Monetary Committee will raise the interest rate next week.

The shekel is strengthening today against the dollar and weakening against the euro. In early afternoon inter-bank trading, the shekel-dollar exchange rate is down 0.37% against the dollar at NIS 3.703/$ and up 0.27% against the euro at 4.228/€.

Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.595% at NIS 3.717/$ on Friday and set the shekel-euro rate up 0.924% at 4.217/€.

The shekel is strengthening against the dollar despite the uncertain political future of the Netanyahu government. It is also stronger despite yesterday's disappointing third quarter GDP growth figure of 2.3%, below the economists' forecast of 2.5%-3%. In addition, the second quarter growth estimate was revised down from 1.8% to 1.2% and the first quarter growth estimate was revised down from 5.1% to 4.6%. The Bank of Israel forecast for GDP growth in 2018 is 3.7%, although in light of these latest figures that forecast is likely to be lowered.

Following the October CPI figure of 0.3% announced by the Central Bureau of Statistics last week, inflation is running at 1.2% in the past 12 months. As the inflation rate is consolidating within the government's annual target range of 1%-3%, Leader Capital Markets macroeconomist Yonatan Katz expects that the Bank of Israel's Monetary Committee will raise the interest rate when it meets next Monday from its historic low of 0.1%, where it has been rooted since March 2015.

Published by Globes, Israel business news - en.globes.co.il - on November 19, 2018

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

Shekel Photo: ASAP Creative
Shekel Photo: ASAP Creative
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