The shekel has been strengthening sharply today against the dollar and against the euro. In early afternoon inter-bank trading, the shekel-dollar exchange rate is down 1.01% at 3.638/$ and the shekel-euro rate is down 1.22% at NIS 3.974/€.
On Wednesday, the Bank of Israel set the representative shekel-dollar rate up 0.437% from Tuesday, at NIS 3.675/$, and the representative shekel-euro rate was set 0.212% higher at NIS 4.023/€.
The shekel has rebounded strongly today on the assumption that a ceasefire with Islamic Jihad will soon be reached despite the successful targeting and killing of its leaders.
Yesterday the IMF cut Israel's growth forecast for 2023 from 2.9% to 2.3% and warned, "Continued uncertainty around the judicial reform presents a notable downside risk to growth." Tomorrow S&P will issue a rating updating on Israel amid hopes that Prime Minister Benjamin Netanyahu has successfully convinced the agency to keep Israel's rating unchanged despite the uncertainty caused by the government's planned judicial overhaul.
Next week's CPI reading for April is expected to be 0.4%-0.5%, which would see annual inflation dip below 5%. On May 22, the Bank of Israel is expected to hike the interest rate by 0.25% to 4.75%.
Published by Globes, Israel business news - en.globes.co.il - on May 11, 2023.
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