The shekel has started today’s session by losing value against the dollar, crossing NIS 4.99/$, a day after Israel’s economic policy decision-makers met in an attempt to soothe concerns about how the economy is being managed.
At web-posting, the shekel stands at NIS 4.991/$ in inter-bank trade, a 0.54% depreciation from Wednesday’s representative rate of NIS 4.964/$.
Against the euro, the shekel is losing 0.33% of its value, to NIS 4.709/€, compared with Wednesday’s representative rate of NIS 4.694/€.
The shekel’s decline indicates that the market is disappointed with yesterday’s much-anticipated meeting between Bank of Israel Governor David Klein and Minister of Finance Silvan Shalom.
After yesterday’s meeting, Klein repeated his announcement that he would raise interest rates again if necessary to restore stability in prices and in the financial system.
At the same time, Klein made clear that rates would rise only to the extent necessary: “The Minister of Finance and I agreed that price stability and financial stability were important, and that if it became necessary to deal with these matters by means of the interest rate we would do so, but there is no need for any early announcement,” said Klein.
Separately, “Globes” has learned that the Ministry of finance has decided against issuing dollar-linked “Gilboa” bonds, as this would be tantamount to direct intervention in the foreign currency market.
Published by Globes [online] - www.globes.co.il - on 13 June, 2002