The shekel is strengthening today against the dollar and against the euro and has reached record levels against a basket of the world's major currencies - known by the the Bank of Israel as the nominal effective rate. In early afternoon inter-bank trading, the shekel-dollar exchange rate is down 0.12% against the dollar at NIS 3.57/$ and down 0.27% against the euro at 4.017/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.475% at NIS 3.561/$ from Friday, and set the shekel-euro rate down 0.297% at 4.028/€. The nominal effective rate was set down 0.451% at 76.446 points and later to fell to 76.3 points a new record. The previous record of 76.65 points was set in September 2018.
The nominal effective exchange rate is a geometric average of the shekel exchange rate vis-à-vis 26 currencies representing 33 countries - Israel’s major trading partners by proportion of trade.
The shekel is trading at its strongest against the dollar since April 2018 and at its strongest against the euro since June 2017.
The Israeli currency was boosted by the 0.5% rise in the Consumer Price Index in March. This was slightly higher than expected and leaves inflation at 1.4% annually, well within the government's 1%-3% annual target range. This means the Bank of Israel will be able to raise the interest rate as planned later this year and close the rate gap with the US dollar.
Published by Globes, Israel business news - en.globes.co.il - on April 16, 2019
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