The interest rate has not been the major factor dictating the direction of the shekel over the past few days but rather the fall in overseas stock markets.
The shekel is weakening today against the dollar and against the euro. In early afternoon inter-bank trading, the shekel exchange rate is up 0.41% against the dollar at NIS 3.433/$ and up 1.19% against the euro at NIS 3.598/€.
The Bank of Israel set the representative shekel-dollar rate down 0.029% on Friday, at NIS 3.419/$, and the representative shekel-euro rate was set 0.056% lower at NIS 3.556/€.
Bank of Israel hikes rate by 0.5%
Analysts see smaller Israeli rate hikes ahead
Last Monday, the Bank of Israel Monetary Committee, headed by Governor Prof. Amir Yaron, hiked the interest rate by 0.5% to 3.25%. This was the sixth rate hike made by the Bank of Israel since April, when it raised the rate from its historical low of 0.1% to 0.35%. Analysts expect two more rate hikes of 0.25% in January and February.
But the interest rate has not been the major factor dictating the direction of the shekel over the past few days but rather the fall in overseas stock markets, forcing Israeli institutional investors to buy shekels to hedge their overseas positions.
Published by Globes, Israel business news – en.globes.co.il – on November 28, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
Shekels credit: Shutterstock Vladerina32