Despite the sharp rises posted in the dollar excahnge rate in the past few days, economists at the largest banks do not anticipate the dollar exchange rate to budge from NIS 4.30 in the next few months. However, they estimate that the "fluctuations" in the foreign currency market are reducing the chances of an interest rate reduction to year-end.
"Despite the developments of the past few days, my work assumptions have not changed," The First International Bank chief economist Hezi Gutman told "Globes" today. "The dollar exchange rate will continue at around NIS 4.30 to year-end. Instead of a continuous rise, we could see much more zig-zagging."
Gutman said that, failing extreme circumstances, there was little chance of the Bank of Israel Governor Yaakov Frenkel's reducing the interest rate before year-end.
Bank Hapoalim chief economist Patahia Bar-Shavit said the bank made an upward adjustment to its 1999 inflation forecast, from 2.2% to 2.9%. "Our basic assumption is that the dollar exchange rate will continue in the vicinity of NIS 4.25-4.30 to year-end. On the way, it is liable to reach higher levels, but it will apparently not be more than NIS 4.35," he said.
According to Bank Leumi chief economist Dr. Gad Shifron, the market fluctuations in the past few days can be attributed to the continued uncertainty surrounding Y2000 Bug and the Budget, and "whether we will emerge from the recession or not." However, he added, "I still believe there will not be a surge similar to October 1998, and the exchange rate will continue in the vicinity of NIS 4.30."
According to Shifron, the recent days' developments in the foreign exchange market "strengthens the Governor's decision not to reduce the interest rate this week, and makes it less likely that he will reduce it next time."
Published by Israel's Business Arena on 26 August, 1999
Danish Co Danwest to Invest $2 Mln in Ramat Hovev Poisionous Waste Treatment Facility
The company plans to promote water and environmental projects in Israel and neighboring countries.
Gadi Golan
Danwest, under the joint ownership of the world's leading emvironmental concerns, the Copenhagen municipality an Clal Industries, today decided to approve an additional $2 million investment to increase output at the poisoinous waste treatnment facility at Ramat Hovev. To date, $40 million has been invested in the facility.
This was agreed today at a meeting between Minister of the Environment Dalia Itzhik and the Lord Mayor of Copenhagen, who is also a company director. During the meeting, the company announced it is planning and acting to promote water and environmental projects in Israel and neighboring countries.
Tomorrow, Itzhik will meet with her Danish counterpart to discuss an internation project for environmental education in Israel, the Palestinian Authority Authority, Jordan and Egypt, financed by the Danish government.
Published by Israel's Business Arena on 26 August, 1999