The shekel will continue to gradually depreciate in the near future, in view of the narrowing interest rate gap between Israel and other countries, but the sizeable gap will nevertheless prevent a steep jump in the shekel exchange rate against other currencies. Bank Hapoalim (LSE:BKHD; TASE:POLI) made this prediction in its weekly survey.
Bank Leumi (TASE:LUMI) predicts greater volatility in foreign currency trading in the short term, as a result of the worsening security situation. The bank expects the foreign currency market to calm down later, since it believes that the 2004 budget presented last week will pass easily.
First International Bank of Israel (TASE:FTIN1) trading room economists believe that this morning’s rise in the shekel-dollar exchange rate was a result of activity by large concerns, including banks purchasing dollars on the market to cover their foreign currency exposure with the expiration of Gilboa bonds.
The Union Bank of Israel believes that the shekel dollar rate this week will be in the NIS 4.47-4.55/$ range.
Bank Hapoalim expects the pace of interest rate cuts to slow, and predicts that the CPI scheduled for publication tomorrow will be 0.1-0.2% higher.
Union Bank believes that August inflation was 0.2%, and predicts 0.3% inflation for September, 0.4% for October, 2.6% for the next 12 months, and 0.2% for 2003 as a whole.
Gift believes that August inflation was only 0.1%, and that the interest rate will be cut by 0.4% at the end of the month.
Published by Globes [online] -l www.globes.co.il - on September 14, 2003