The dollar has exceeded the NIS 4.30 mark, following yesterday’s wave of terrorist attacks. The shekel-dollar representative rate set a new record today of NIS 4.314, a 0.44% devaluation compared with last week. The shekel has now reached its lowest point vis-a-vis the dollar since November 1998.
The dollar opened trading at NIS 4.305. Shortly before the publication of the representative rates, however, foreign banks injected sizeable demand into the market, which sent the shekel down slightly more.
Most demand today was from foreign banks and financial institutions. Trading volume was high. Bank traders believe that trade volumes were particularly high at the end of the week, exceeding $2.8 billion, of which $1.2 billion was in cash transactions.
Foreign bank activity last week reached a record average of $1.3 billion
The banks are convinced that some response from the Bank of Israel is necessary in order to stop the devaluation, since inflation forecasts for the next two years have already surpassed 3%, above the upper limit determined by the government.
At the same time, the interest rate is not expected to rise this month unless the dollar exceeds NIS 4.50. It appears that Governor of the Bank of Israel David Klein prefers to wait another month before raising the interest rate.
Published by Israel's Business Arena on September 10, 2001