Reaction on the foreign exchange market to yesterday's announcement of an interest rate cut by the Bank of Israel has been moderate this morning. In part this is due to the fact that there is no trading in Europe and New York because of the Christmas holiday.
In fact, the shekel strengthened slightly in early options trading. The implied shekel-dollar rate in options trading is currently up 0.1% in comparison with yesterday's representative rate, at around NIS 3.75/$. The shekel-euro rate is down 0.2%, at NIS 4.9460/€.
The Bank of Israel sprung a surprise yesterday by announcing a cut of 0.25% in its key rate for January, to 1.75%. A senior Bank of Israel official told "Globes" that "the decision is for the present, and does not indicate a new trend."
The Bank of Israel has also revised its growth forecast. This month, the research department updated its growth forecast for the coming year. Excluding the impact of the start of natural gas production from the new field, Tamar, growth in 2013 was revised downward to 2.8%, compared with 3% in the previous forecast. The forecast including natural gas production is for 3.8% growth, compared with 3% in the previous forecast.
Published by Globes [online], Israel business news - www.globes-online.com - on December 25, 2012
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