The shekel is strengthening today against the dollar and against the euro. In morning inter-bank trading, the shekel-dollar exchange rate is down 0.29% against the dollar at NIS 3.558/$ and down 0.28% against the euro at 4.164/€, Globes reports.
Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.028% at NIS 3.568/$ from Friday's rate and set the shekel-euro rate down 0.115% at 4.176/€.
The Bank of Israel will announce the interest rate for June this afternoon and it would be a huge surprise if there was any change. The Bank of Israel Monetary Committee cut the rate to an historic low of 0.1% in March 2015 and it has been unchanged ever since. The recent rise in inflation to 0.4% over the past year, after nearly four years of negative inflation, moves it towards the government target range of 1%-3% and should allow the Bank of Israel to start raising the interest rate as planned in the final quarter of 2018. The rise of oil prices on world market also supports the forecast that inflation in Israel is set to rise, and with it interest rates.
This together with Israel's strong macroeconomic data such as GDP growth of more than 4% annually, all indicates that the shekel is likely to remain strong.