The shekel is weakening today against the dollar and against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate was up 0.48% against the dollar at NIS 3.280/$ and the shekel-euro rate was up 1.03% at NIS 4.011/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate unchanged from Tuesday, at NIS 3.264/$, and the representative shekel-euro rate was set 0.066% higher, at NIS 3.970/€.
Despite today's movement the shekel has been relatively stable, trading within the NIS 3.25-3.30/$ range since the impact faded from the Bank of Israel's announcement on January 14 that it would buy $30 billion in foreign currency this year. However, it took foreign currency purchases of over $6 billion to keep the shekel within this range in January and it will be interesting to see the Bank of Israel's announcement next month as to how more foreign currency it bought in February.
The shekel is weakening very sharply against the euro and has breached the NIS 4.00/€ threshold for the first time since the beginning of November 2020.
Earlier this week, the Bank of Israel announced that interest rate would remain unchanged at 0.1%. It gave a bullish growth forecast of 6.3% for this year but warned that unemployment would remain high. The Bank of Israel expects inflation to rise within its target range of 1%-3% this year.
Published by Globes, Israel business news - en.globes.co.il - on February 25, 2021
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