FXCM Israel: The Bank of Israel rules out use of negative rates or monetary expansion.
The shekel is weakening against the dollar and strengthening against the euro ahead of this afternoon's interest rate decision for August by the Bank of Israel Monetary Committee. The interest rate has been unchanged at a historic low of 0.1% since March 2015 and it would be a major surprise if there was any change today. Bank of Israel Governor Dr. Karnit Flug has said that she does not see interest rates rising before the final quarter of 2017.
In early afternoon inter-bank trading, the shekel was up 0.20% against the dollar from Friday's representative rate at NIS 3.847/$ and was down 0.28% against the euro at NIS 4.223/€.
The Bank of Israel set the shekel-dollar representative rate down 0.492% on Friday at NIS 3.839/$, and the representative shekel-euro rate was set down 0.313% at NIS 4.235/€.
FXCM Israel said, "The split between what is happening to the dollar in Israel and around the world continues. Worldwide the dollar index is at a four and a half month high but in Israel the shekel-dollar exchange remains below NIS 3.85/$ at the mid-range of the NIS 3.80-3.90/$ trading band in which the two currencies have been trading since May. The shekel is being supported by the Bank of Israel, which rules out for the time being use of unconventional instruments such as negative interest rates and monetary expansion in contrast to the central banks in Japan, Britain and the Euro zone."
Published by Globes [online], Israel business news - www.globes-online.com - on July 25, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016
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