Shekel strengthens to 1997 levels
A rise continues despite a 50 basis point rate cut by the Bank of Israel two weeks ago.
Erez Wollberg 11 Mar 08 14:08
The shekel is appreciating against the dollar and euro in inter-bank trading. By early afternoon, the shekel-dollar exchange rate was down 1.44% to NIS 3.525/$ and the shekel-euro exchange rate is down 0.7% to NIS 5.4455/€. The shekel appreciation is continuing, despite the 50-basis point interest rate cut by Governor of the Bank of Israel Prof. Stanley Fischer two weeks ago. The current level of the shekel-dollar exchange rate was last seen in December 2007.
Federal Reserve Board Chairman Ben S. Bernanke is expected to make another interest rate cut, probably by 50 basis points. A cut of this size will widen the gap between the shekel and dollar interest rates in favor of the shekel to x%.
Yesterday's shekel-dollar representative exchange rate was set at NIS 3.577/$, down 0.64% from the day before, and the shekel-euro representative exchange rate was set NIS 5.49/€, down 0.93%.
Easy Forex notes that the shekel-dollar exchange rate is at a ten-year low. It attributes the shekel's appreciation to yesterday's release by the Bank of Israel of the minutes of the interest rate decision, which showed disagreements between members of the Monetary Council over the size of the interest rate cut. An additional factor for the shekel's appreciation is the dollar's weakness on international markets.
Published by Globes [online], Israel business news - www.globes-online.com - on March 11, 2008
