News Brief

(IsraelNN.com) The shekel-dollar dropped to 3.285 Tuesday afternoon, the lowest since January, 1997, and analysts said it could continue to drop further. The shekel strengthened after Bank of Israel Governor Prof. Stanley Fischer Monday evening raised the interest rate by a quarter of one percent, making the shekel more attractive to investors.

The Bank hinted that further increases might be in store if inflation does not tame down. The consumer price index jumped 1.5 percent in April, and the May index, which will be announced in three weeks, may have jumped one percent.

Fischer announced last month that the Bank will spend billions of shekels to buy dollars in an effort to prop up the rate and keep it from hurting exports. However, he previously had warned that central bank interference often backfires because it cannot supply enough money to counter long-term trends.