Bethel Finance news:
Israel’s shekel strengthened for a second day on investor speculation the central bank may hold off cutting rates this month as the economy grows at a faster pace than many advanced countries.
The shekel gained as much as 0.7 percent against the dollar to 3.8051, the highest since Jan. 3. The currency was at 3.8152 at 12:20 p.m. in Tel Aviv. Two-year interest-rate swaps, an indicator of investor expectations for rates over the period, rose one basis point, or 0.01 percentage point, to 2.55 percent, the highest level since Dec. 14" said Mr. Cedric Marmet (Bethel Finance Ltd).
Israel’s economy will grow 3.2 percent in 2012, Finance Minister Yuval Steinitz told a parliamentary committee in Jerusalem today. The World Bank said today the world economy will grow 2.5 percent this year, down from a June estimate of 3.6 percent.
“The local economy is still expanding at a fairly good pace and the central bank may wait and hold interest rates this month to cut rates in coming months,” Eytan Admoni, head of the international department at Bank of Jerusalem Ltd., said by telephone.
Holding Rates
Israel’s monetary policy committee, led by central bank Governor Stanley Fischer, kept its benchmark rate unchanged in December, after reducing it twice in three months, saying the economy was still expanding and that policy makers wanted to retain their ability to react to developments. The next rate decision is scheduled for Jan. 23. Admoni expects the benchmark lending rate will fall to 2 percent by year end.
The yield on inflation-linked bonds due June 2013 declined for a second day, retreating one basis point to 0.47 percent. The two-year break-even rate, the yield difference between the inflation-linked bond and fixed-rate government bonds of similar maturity, increased four basis points to 205, implying an average annual inflation rate of 2.05 percent.
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