On Monday, the Bank of Israel Monetary Committee will decide on the interest rate for the coming month with speculation that it may cut the rate from 0.25% to 0.1%.
The shekel is weakening sharply today against the dollar and against the euro. In afternoon inter-bank trading the shekel-dollar exchange rate was up 2.42% at NIS 3.642/$ and up 2.18% against the euro at NIS 3.975/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate 0.25% lower at NIS 3.5560/$, and the representative shekel-euro rate was set 0.27% lower, at NIS 3.8899/€.
The shekel has ended a week of strong gains, which saw it move back towards pre-crisis levels. But a pattern has emerged in recent weeks whereby sharp falls on the international stock markets see the shekel lose ground as Israeli institutional investors must buy foreign currency to cover their overseas positions and vice-versa. So it could be that yesterday's sharp falls on stock markets around the world is influencing forex trading today. The Bank of Israel has partly countered this effect by providing up to $15 billion in loans to the banks from its $130 billion foreign exchange reserves.
On Monday, the Bank of Israel Monetary Committee will decide on the interest rate for the coming month with speculation that it may cut the rate from 0.25% to 0.1% - a step that could weaken the shekel.
Published by Globes, Israel business news - en.globes.co.il - on April 2, 2020
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Shekel Photo: ASAP Creative