Shekel slips further on weak growth data

Shekel  / Photo: Shutterstock

After July's lower than expected CPI reading, the Israeli currency has been further weakened by poor second quarter growth figures.

The shekel is weakening today against the dollar and against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate is up 0.13% against the dollar at NIS 3.546/$ and up 0.26% against the euro at 3.935/€.

The Bank of Israel set the shekel-dollar representative rate up 0.625% on Friday at NIS 3.541/$ and set the shekel-euro rate up 0.043% at 3.925/€.

At the beginning of last week the shekel was strengthening and on the way to NIS 3.45/$ after Goldman Sachs issued a forecast entitled "The Unstoppable Shekel." But the Israeli currency has been stopped, for the time being. Firstly by lower than July's lower than expected Consumer Price Index (CPI) reading of minus 0.3%, which leaves inflation over the last 12 months at 0.5%, well below the Bank of Israel's annual target range of between 1% and 3%. Secondly by poor second quarter GDP growth of just 1% on an annualized basis.

Next week, the Bank of Israel Monetary Committee will announce the interest rate for September. However, Bank of Israel Governor Prof. Amir Yaron has already made it clear that there will be no rate hike in the near future.

Published by Globes [online], Israel business news - en.globes.co.il - on August 19, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Shekel  / Photo: Shutterstock
Shekel / Photo: Shutterstock
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