Gift: The bank will cut its interest rate further in future, if inflation stays too low.
Gift Asset Management Ltd. says the shekel’s appreciation against the dollar has been minimal compared with other currencies, and reflects expectations that the Bank of Israel will cut the interest rate, and severe political and security problems facing the Olmert government. Gift predicts that the Bank of Israel will cut the interest by 0.25% next Monday, leaving the shekel rate lower than that of the dollar.
In its weekly report, Gift says the shekel-dollar exchange rate traded within a range of NIS 4.30-4.35/$ last week, but that the dollar depreciation against other currencies on Friday pushed the exchange rate to below NIS 4.30/$. Gift says there is a good support level at NIS 4.28/$ and then at NIS 4.255/$, and believes that the chance of a rise of NIS 4.35/$ has been postponed but not eliminated.
Gift predicts that the Bank of Israel will cut the interest rate further in the future, if inflation stays below the 1% minimum target level.
Published by Globes [online], Israel business news - www.globes.co.il - on November 26, 2006
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