Inflation probably slowed in February, while remaining above the upper limit of the government target range for a third consecutive month, a survey showed. The rate probably declined to 3.4 percent from 3.5% in January, according to the median estimate of seven economists in a Bloomberg survey. The Central Bureau of Statistics in Jerusalem will announce the data at 2 pm on Friday. "The strengthening of the shekel, if it continues during the year, increases the chance of the inflation rate returning to the target range," Harel Insurance & Finance Ltd. said in report to investors on Thursday. The government's annual target range is 1% to 3%. Bank of Israel Governor Stanley Fischer unexpectedly lowered the benchmark lending rate by a half point to 3.75% on February 25 saying a stronger shekel and slower economic growth would help reduce inflation. Since then, the shekel has gained 6.6% as the dollar slumps. The shekel was trading near an 11-year high at NIS 3.40 on Thursday afternoon. Fischer expects the inflation rate to decline to within the target range during the second half of the year and drop to close to the midpoint by year-end, according to the minutes of the bank's meeting. A strengthening shekel reduces the costs of housing and other dollar-linked items. The bank will keep its main lending rate at 3.75% at its March 24 meeting, according to five out of seven economists surveyed by Bloomberg News. One predicted a quarter-point reduction, and another a half-point reduction. Inflation expectations for the next 12 months declined by 0.2 percentage points from the previous month to about 2.2% in February, according to a survey of economists by the Bank of Israel that was included in minutes of the bank's rate-setting meeting.