The shekel has been weakening today against the dollar and against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate is up 0.98% at 3.687/$ and the shekel-euro rate is up 0.53% at NIS 3.973/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate up 0.165% from Friday, at NIS 3.651/$, and the representative shekel-euro rate was set 0.578% higher at NIS 3.952/€.
The shekel is weaker today even though the Bank of Israel Monetary Committee, headed by Governor Prof. Amir Yaron, yesterday raised the interest rate from 4.5% to 4.75%, the tenth rate hike in just over a year.
The latest hike comes after an unexpectedly high Consumer Price Index (CPI) reading for April published last week, which keeps annual inflation in Israel at 5%. Unlike in the US and Europe, inflation shows no signs of moderating in Israel.
The Bank of Israel had previously forecast that the interest rate would not reach 4.75% until the end of the year. When interviewed after the rate hike announcement, Yaron was not prepared to say that this might be the last rate hike.
Published by Globes, Israel business news - en.globes.co.il - on May 23, 2023.
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