This evening Israel’s Central Bureau of Statistics will announce the Consumer Price Index reading for November with analysts expecting a 0.15% rise, which would push up Israel’s annual inflation rate to 5.3%.
The shekel is weakening today against the dollar and against the euro. In morning inter-bank trading, the shekel exchange rate is up 0.54% against the dollar at NIS 3.429/$ and up 0.36% against the euro at NIS 3.644/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.670% from Tuesday, at NIS 3.410/$, and the representative shekel-euro rate was set 0.321% higher at NIS 3.630/€.
The shekel is weaker today after the US Federal Reserve raised the interest rate by 0.5% yesterday to 4.25-4.5%, after four consecutive 0.75% hikes. The fed said there would be more hikes with the rate expected to reach 5-5.25% by the end of 2023. The Bank of Israel is expected to hike the interest rate by 0.25% next month to 3.5%.
But it is not the interest rate gap that is weakening the shekel, according to most experts, but rather the continued declines on overseas stock markets, which is forcing Israeli institutional investors to sell shekels and buy foreign currency to hedge their positions abroad. However, the rise in interest rates is a major factor in pushing down stock markets.
This evening Israel’s Central Bureau of Statistics will announce the Consumer Price Index reading for November with analysts expecting a 0.15% rise, which would push up Israel’s annual inflation rate to 5.3%.
Published by Globes, Israel business news – en.globes.co.il – on December 15, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
Shekels credit: Shutterstock Vladerina32
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