Shekel gains against dollar after interest rate hike

January 25, 2011 11:58

The shekel on Tuesday gained against the dollar as investors reacted to Monday's interest rate hike by the Bank of Israel.

The interest rate was raised from 2% to 2.25%.

The shekel-dollar exchange rate was down 0.67% to NIS 3.6008/$, and the shekel-euro exchange rate is up 0.1% to NIS 4.9211/€.

The Bank of Israel, led by Governor of the Bank of Israel Prof. Stanley Fischer, said that the move is part of a gradual process of returning the interest rate to a more normal level, so that it can keep inflation within the 1-3% target range as well as support economic growth and financial stability.

The bank's decision specifically mentioned housing prices, saying that their acceleration "was renewed" last month, and they have risen 17.3% in the past twelve months.

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