The shekel is weakening today against the dollar and against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate was up 0.23% against the dollar at NIS 3.265/$ and the shekel-euro rate was up 0.26% at NIS 3.939/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate 0.618% up from Tuesday, at NIS 3.257/$, and the representative shekel-euro rate was set 0.185% lower, at NIS 3.929/€.
The Bank of Israel will announce its interest rate decision on Monday with some speculation that it may cut the already historical low interest rate of 0.1% to negative territory because of the negative yields on short-term government bonds.
The dollar is strong on world markets after better than expected economic data including strong retail figures.
In Israel the Central Bureau of Statistics announced that the Israeli economy only contracted by 2.4% in 2020, well below the Bank of Israel's forecast of a 3.7% contraction.
Until yesterday, the shekel had been strengthening since the beginning of February when it has reached NIS 3.30/$, after depreciating from NIS 3.116/$ last month after the unexpected announcement by the Bank of Israel that it will buy $30 billion in foreign currency in 2021. Earlier this month Bank of Israel Governor Amir Yaron said that foreign currency purchases could even exceed $30 billion, after revealing that nearly 25% of the $30 billion had already been bought in January in efforts to weaken the shekel.
Published by Globes, Israel business news - en.globes.co.il - on February 18, 2021
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