The shekel is strengthening against the dollar and against the euro. In early afternoon inter-bank trading, the shekel-dollar exchange rate is down 0.62% from yesterday's representative rate at NIS 3.472/$, and down 0.60% against the euro at 4.285/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.258% from Friday's exchange rate at NIS 3.494/$ and set the shekel-euro rate up 0.408% at 4.311/€.
The representative rate was set just before the Bank of Israel announced that it was keeping the interest rate unchanged in March at its historic low of 0.1%. The rate has now been unchanged since March 2015.
The Bank of Israel insisted that inflation is expected to return to its target range of 1%-3% for the first time since 2013. If this is the case then there may be interest rate hikes towards the end of 2018.
The Bank of Israel said, "The inflation environment remains below the target, but there has been some increase in inflation expectations for the short and medium terms. In the coming months a temporary decline in the annual inflation rate is expected. The depreciation that occurred in the past month, to the extent it persists, as well as the wage increase in the economy, will support the return of inflation to the target range."
Published by Globes [online], Israel business news - www.globes-online.com - on February 27, 2018
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