Several financial analysts have predicted that the shekel-dollar rate may sink to 3.00, a level that was last reached in 1995. The rate is quoted at this hour at 3.37 shekels to the dollar, matching an 11-year-low reached earlier this year. It traded as low as 3.36 earlier Monday.
The future of the rate may be determined next week when Bank of Israel Governor Prof. Stanley Fischer decides whether to hike the interest rate in the wake of a 1.5 percent increase in the consumer price index for April. Most media reports have said he will be forced to raise the interest rate, which would make the shekel even more attractive to investors, put downward pressure on the shekel-dollar rate and hurt exports.
However, the principal causes in the rising inflation have been energy and food price increases, and it is doubtful that an interest rate hike would dampen inflation.