The shekel has been weakening today against the dollar and against the euro. In inter-bank trading this afternoon the shekel-dollar exchange rate is up 0.38% at 3.662/$ and the shekel-euro rate is up 0.51% at NIS 3.986/€.
On Monday, the Bank of Israel set the representative shekel-dollar rate up 0.165% from Friday, at NIS 3.648/$, and the representative shekel-euro rate was set 0.387% lower at NIS 3.965/€.
Yesterday's higher than expected rise in the April Consumer Price Index (CPI) of 0.8% makes a rate hike next week inevitable. Annual inflation in Israel remains at 5%, higher than in the US, as the Bank of Israel battles to curb what is proving to be very sticky inflation. Next week's will be the tenth rate hike in just over a year and some economists say it may not be the last rate hike. The Bank of Israel Monetary Committee is expected to hike the rate from 4.5% to 4.75%.
This afternoon the Central Bureau of Statistics reported that first quarter GDP growth was 2.5% on an annualized basis in line with the Bank of Israel's forecast and slightly below the Ministry of Finance's forecast of 2.7% but well above the IMF's forecast of 1.5%.
Published by Globes, Israel business news - en.globes.co.il - on May 16, 2023.
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