The shekel is strengthening today against the dollar and stable against the euro. In late morning inter-bank trading, the shekel-dollar exchange rate is down 0.27% against the dollar at NIS 3.568/$ and down 0.43% against the euro at 4.001/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.252% today at NIS 3.577/$ from Monday, and set the shekel-euro rate up 0.227% at 4.018/€.
The Central Bureau of Statistics will report the Consumer Price Index reading for April this evening with analysts predicting a 0.5% rise due to increases in fuel prices and clothing and fashion.
With inflation in Israel now well entrenched within the government's target range of 1% to 3%, many are predicting that the Bank of Israel will raise the interest rate at its meeting next Monday. The estimated 5% first quarter growth figure, on an annualized basis, (boosted by a sharp rise in exports), which the Central Bureau of Statistics is expected to announce tomorrow, further enhances the likelihood of a rate hike.
However, global uncertainty (Brexit and the US-China trade talks) and the appreciation of the shekel, which has strengthened by 1.7% against the dollar over the past two weeks, could persuade the Bank of Israel to hold off on its planned interest rate hike. Israel's interest rate is 0.25%, after it was raised in November 2018 from its historic low of 0.1%.
Published by Globes, Israel business news - en.globes.co.il - on May 15, 2019
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