Israel Currency Discussion Board

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USD rallying to NIS 4.161 in Sunday shekel-dollar options trade
01.4.07 | 15:43 By Tal Levy
The dollar is rallying in shekel-dollar options trade from its nearly six-year low hit on Friday. The shekel-dollar options trading Sunday on the Tel Aviv Stock Exchange reflect an exchange rate of NIS 4.161.

The greenback has been creeping down for a year now. Just 12 months ago it was trading at NIS 4.70.

While it hasn't done well in world markets in the last year, over in Israel, the shekel has proved extraordinarily strong, despite the Bank of Israel's efforts to weaken the local currency. The shekel's strength is responsible for the negative inflation in 2006, minus 0.1%, while the government's price stability target range is 1-3%.

To weaken the shekel, the Bank of Israel has been cutting interest rates. But it hasn't worked, as foreign investors continue to buy shekels to make investments in Israel.

In world markets the dollar weakened at the end of last week to 1.3354 per euro.

In other Bank of Israel news, it said today that Israel's foreign currency reserves totaled $30.5 billion at the end of March 2007, down $311 million from the end of February.


http://www.haaretz.com/hasen/spages/844595.html