The shekel is strengthening today against the dollar and against the euro. In afternoon inter-bank trading the shekel was down 0.21% against the dollar at NIS 3.427/$ and down 0.29% against the euro at NIS 3.714/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate 0.087% higher than Friday, at NIS 3.434/$, and the representative shekel-euro rate was set down 0.110% at NIS 3.725/€.
After last Friday's lower than expected Consumer Price Index reading of -0.4% for January, Leader Capital Markets macroeconomist Yonatan Katz said, "The rate of year-on-year inflation in Israel has now fallen to 0.3% in January and is expected to continue falling in the coming months. This increases the likelihood of an interest rate cut."
The Bank of Israel Monetary Committee meets next Monday to decide on the interest rate.
Despite the possibility of a rate cut from 0.25% to 0.1%, the shekel continues to strengthen and is trading at two year lows against the dollar and 18 year lows against the euro. The Israeli economy's fundamentals are very strong with the 2019 GDP growth rate estimate revised upwards to 3.5%, unemployment at a new low of 3.4% and the budget deficit narrowing to 3.2% over the past 12 months from 3.8% at the end of December.
Published by Globes, Israel business news - en.globes.co.il - on February 17, 2020
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