The shekel is strengthening today against the dollar and against the euro. In late morning inter-bank trading, the shekel-dollar exchange rate is down 0.68% against the dollar at NIS 3.592/$ and down 0.42% against the euro at 4.067/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.166% at NIS 3.617/$ from Tuesday's rate and set the shekel-euro rate up 0.093% at 4.085/€.
The shekel has dipped below the NIS 3.60/$ threshold for the first time since September 2018.
The shekel is stronger on forex markets ahead of tomorrow's publication of Israel's February Consumer Price Index (CPI) by the Central Bureau of Statistics. With inflation in Israel currently running at 1.2% annually, at the bottom end of the Bank of Israel's 1%-3% annual target range, it is imperative that inflation remains stable or rises if the Bk of Israel is to proceed with its plan of raising the interest rate later this year. The last three CPI readings have been negative but with oil prices rising, February's reading should break this run.
In the Bank of Israel Monetary Committee last meeting, members noted during their interest rate deliberations that the effective nominal rate of the shekel, which had strengthened by 2% since the previous interest rate decision was stymying inflation and leaving it beneath the target range of 1%-3% annually.
Published by Globes, Israel business news - en.globes.co.il - on March 14, 2019
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