With inflation rates rising in Israel, the Bank of Israel’s Monetary Committee is not expected to cut interest rates on Wednesday.
The shekel exchange rate rose sharply today against the US dollar and the euro. In late morning interbank trading, the shekel-dollar exchange rate fell by 1.25% to NIS 3.658/dollar, and the shekel-euro exchange rate fell by 0.71% to NIS 4.090/euros.
The Bank of Israel set the shekel-dollar exchange rate on Friday down 0.537%, at NIS 3.704 per dollar, and the shekel-euro exchange rate down 0.682%, at NIS 4.119 per euro.
The shekel strengthened for several reasons, as the dollar weakened globally after US Federal Reserve Chairman Jerome Powell spoke about cutting interest rates in the future. Speaking about interest rates, Powell said: “It is time to adjust policy.”
The Bank of Israel’s Monetary Committee will announce its decision on interest rates on Wednesday, but with inflation back above the annual target range of 1% to 3%, a rate cut seems unlikely.
Wall Street has also seen a significant rise as Israeli institutional investors have had to sell foreign currency and buy shekels to cover their investments. Geopolitical tensions remain high, but there is cautious optimism about the hostage negotiations, which is boosting the shekel, and so far yesterday’s successful preemptive strike on Hezbollah rocket launchers in Lebanon has passed without any immediate threats of retaliation.
This article was published in Globes, Israeli Business News – en.globes.co.il – on August 26, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
Shekel Image source: Shutterstock Vladerina32
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