Monday afternoon the shekel strengthened against the dollar, with a representative exchange rate of NIS 4.6420, down 1.2% from Friday's representative rate, NIS 4.70. The NIS 4.6420 rate is to apply to the expiry of the February dollar options series.
Many customers preferred not to make deals in the afternoon and wait to hear the announcement on key lending rates made at 16:30 today. At any rate, dealers said that a 0.5% rise in interest rates is already incorporated in the dollar price.
Bank of Israel Governor David Klein raised March interest rates by 0.6%, from 3.8% to 4.4%. The shekel traded unchanged after the announcement.
For the first time in many months dealers had been divided on Bank of Israel's likely move. Some anticipated a 1% hike in key interest rates, while others estimated that interest rates would remain unchanged.
Afternoon trading in short-term debt certificates reflected interest rates rising 0.7%