The shekel is continuing to strengthen ahead of Monday's interest rate call by the Bank of Israel Monetary Committee. In afternoon inter-bank trading, the shekel exchange rate is down 0.41% against the dollar at NIS 3.246/$ and is down 0.40% against the euro at NIS 3.300/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.428% from Tuesday, at NIS 3.259/$, and the representative shekel-euro rate was set 0.090% lower at NIS 3.313/€.
On Monday, the Bank of Israel Monetary Committee will announce its latest interest rate decision, with most analysts expecting a hike of 0.5% to 1.75%. This would be the fourth rate hike since April, when interest was at its historic low of 0.1%.
However, following the unexpectedly high July Consumer Price Index (CPI) reading of 1.1%, which pushed Israel's annual rate up to 5.2%, some economists are urging a more aggressive 0.75% rate hike on Monday to dampen inflation. This would also narrow the interest rate gap between the shekel and the dollar. Israel's unexpectedly high GDP growth figure of 6.8% in the second quarter also indicated that an aggressive rate hike might be on the horizon.
Meanwhile the shekel is trading against the dollar at an exchange rate not seen since April, as well as record lows against the euro.
Published by Globes, Israel business news - en.globes.co.il - on August 18, 2022.
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