Shekel gains against dollar after surprise CPI

Shekel Photo: ASAP Creative

The Israeli currency has stabilized since early May around NIS 3.50/$, in part due to Bank of Israel foreign currency purchases.

The shekel is strengthening today against the dollar and stable against the euro. In afternoon inter-bank trading the shekel-dollar exchange rate was down 0.69% at NIS 3.471/$ and up 0.01% against the euro at NIS 3.932/€.

Yesterday, the Bank of Israel set the shekel 0.895% higher from Friday at NIS 3.495/$, and the representative shekel-euro rate was set 0.206% higher, at NIS 3.932/€.

Yesterday the Central Bureau of Statistics announced that Israel's Consumer Price Index (CPI) unexpectedly fell 0.3% in May. This figure was far lower than expected with analysts forecasting that the May CPI would be unchanged or rise by up to 0.2%. Since the start of 2020, the CPI has fallen by 0.7% and over the past 12 months it has fallen by 1.6%.

For its part the Israeli currency has stabilized since the beginning of May around the NIS 3.50/$ level, and in the past two weeks between NIS 3.45-3.50/$, just above the exchange rate prior to the coronavirus crisis in February. However, earlier this week Bank of Israel Governor warned that the shekel is still liable to be volatile with high risks persisting.

The underlying strength of the shekel was revealed last week when the Bank of Israel reported that it purchased $2.623 billion in foreign currency in May in order to weaken the shekel.

Published by Globes, Israel business news - en.globes.co.il - on June 16, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Shekel Photo: ASAP Creative
Shekel Photo: ASAP Creative
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