Shekel strengthens after May rate left unchanged

shekels
shekels

The shekel-dollar exchange rate has fallen below the key NIS 3.90/$ threshold.

The shekel is stronger against the dollar and against the euro in inter-bank trading this evening after the Bank of Israel Monetary Committee announced this afternoon that the May interest rate would remain unchanged at an historic low of 0.1%. The shekel-dollar exchange rate is currently trading down 0.85% against the dollar at NIS 3.897/$, below the key NIS 3.90/$ threshold, and the Israeli currency is down 0.57% against the euro at 4.236/€.

While most analysts had predicted the rate would remain unchanged, some analysts had seen the Bank of Israel cutting the rate to zero.

Earlier this afternoon, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.931/$, up 0.178% on last Friday's rate, and set the shekel-euro representative exchange rate at NIS 4.26/€, down 0.211%.

In citing the reasons for its decision, the Bank of Israel Monetary Committee said, "From the monetary policy discussion on March 22, 2015, through April 24, 2015, the shekel strengthened by 3% against the dollar, and appreciated by 1.7% in terms of the nominal effective exchange rate. For the year to date, there has been an effective appreciation of 3.7% in the shekel, against the background of accommodative monetary policy in several major economies, among other reasons. A decline in the projected rate of world trade growth and continued appreciation are liable to weigh on growth of exports and of the tradable sector."

Published by Globes [online], Israel business news - www.globes-online.com - on April 27, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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