Shekel slips against dollar and euro

Both dollar and euro appreciate by 0.5%, with greenback nearing 3.60 shekels and single currency trading around 3.93 shekels; analysts believe Bank of Israel unlikely to cut interest rates in upcoming April decision

The shekel on Monday weakened by 0.5% against the dollar, now trading at roughly 3.60 shekels, and the euro, trading around 3.93 shekels.
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Meanwhile, analysts doubt the Bank of Israel will cut its benchmark interest rate in the upcoming April 8 decision, following similar trends in the United States and Europe.
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שקל דולר ואירו
שקל דולר ואירו
Dollar, shekel, euro
(Photo: Shutterstock)
The ongoing war against Hamas in Gaza and consequent growth in defense expenditures, combined with the Finance Ministry's reluctance to reduce the deficit, will make it harder for the central bank to lower interest rates again this year, following a 25 bps cut to an annual rate of 4.5% on January 1.
On Wednesday, the Knesset is set to approve the 2024 budget, with the Bank of Israel watching its performance to determine the feasibility of further interest rate cuts later in the year.
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סמוטריץ' לא חוזר בו מהקפאת הכספים לרשויות הערביות: "לא נבהל מהמתקפות"
סמוטריץ' לא חוזר בו מהקפאת הכספים לרשויות הערביות: "לא נבהל מהמתקפות"
Finance Minister Bezalel Smotrich
(Photo: Alex Kolomoisky)
Economic analysts predict the base interest rate may fall to 3.75%-4.0% by year's end. "Market expectations for immediate interest rate cuts have sharply declined, causing stock market volatility in the U.S. and Europe," said Joseph Freiman, CEO of Prico and Freiman Holdings Group.
"Efforts to minimize currency exposure and cautious approaches by countries are stabilizing the shekel's exchange rate between 3.55-3.65 per dollar. Yet, potential for shekel depreciation exists amid budget deficit increases, credit rating downgrades, and security concerns, possibly exceeding 3.6 shekels."
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