The black forecast for the dollar exchange rate “may fall by up to 3 shekels”

by time news

Dollars (pixabay photo)

After the low point recorded last Wednesday, when the dollar traded at less than NIS 3.06, it went to the rally and traded at NIS 3.15. It will be recalled that on Tuesday the dollar traded stable at NIS 3.08, which increases the estimates that the Bank of Israel is responsible for the strengthening of the American currency.

Credit Suisse Investment Bank has published its investment forecasts for the coming year, and the Swiss bank’s reference to the Bank of Israel’s monetary policy states that the approach to keeping interest rates low in order to stimulate the economy is expected to moderate, but interest rate hikes are not forthcoming.

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“The Bank of Israel is expected to remain neutral in the coming months, with inflation likely to rise and reach the upper limit of the target range set by the central bank of 1% -3%. Of the year, and may consider raising interest rates only if inflation surprises. The Bank of Israel expects inflation to moderate from 2.5% in the last quarter of 2021 to 1.6% in the last quarter of 2022.

As for the exchange rate, Credit Suisse says that “it seems that the shekel will remain subject to continuous structural appreciation pressures also in 2022, as a result of a significant surplus in the current account and a constant sale of dollars by local institutional investors while hedging their foreign investments.”

Although Credit Suisse economists expect the current account surplus to shrink in the coming quarters (from an annual high of 5.7% in the second quarter of 2021), the balance of payments is expected to continue to support the shekel in the near future. “As these trends continue, the Bank of Israel is expected to continue to allow for further gradual and moderate declines in the dollar and euro in 2022, as long as inflation remains relatively high. The exchange rate of the dollar against the shekel may fall to NIS 3 to NIS 3.05 in the first half of next year.” .

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