The shekel has been boosted by rising inflation and the expectation of interest rate hikes in 2018.
The shekel is strengthening against the dollar and against the euro today after the October Consumer Price Index (CPI) was slightly higher than expected. In early afternoon inter-bank trading, the shekel-dollar exchange rate was down 0.19% from yesterday's representative rate at NIS 3.525/$, and down 0.74% against the euro at 4.152/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.339% from Tuesday's rate at NIS 3.532/$ and set the shekel-euro rate up 0.500% at 4.182/€.
The shekel was boosted last night, after the Central Bureau of Statistics reported that the Consumer Price Index rose 0.3% in October, slightly higher than the analysts' forecast of 0.2%. Price inflation for the twelve months to the end of October was 0.2% and 0.6% since the beginning of 2017, moving closer to the government target range of 1%-3%. Rising inflation and the end of nearly four years of deflation in Israel has encouraged speculators to believe the Bank of Israel will go ahead with planned interest rate hikes in the second half of 2018. Interest rates in Israel have been rooted at a historic low of 0.1% since March 2015 - one of the reasons for the shekel's strength, especially as interest rates have been rising in the US and elsewhere over the past year.
Published by Globes [online], Israel business news - www.globes-online.com - on November 16, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017
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