Nessuah Zannex analysts believe the shekel-dollar rate will trade stably within a range of NIS 4.29 to NIS 4.335 until year-end.

The analysts estimate that the dollar will end 2001 at about NIS 4.25 to 4.30.

So far this year the dollar has strengthened by 6.9% against the shekel.

The analysts attribute the exchange rate's stabilization, biased by the shekel's tendency to weaken slightly, to the widened interest rate gap between Israel and the United States. They also factored in an assessment that the spread will widen further.

The gap today stands at 3.8%.

Inflation expectations had been on the rise lately, but now appear to be waning among institutionals, the analysts add.

The analysts foresee the public investing in shekel-denominated assets again, based on the assessment that the dollar will not substantially strengthen further this year. The public withdrew massive amounts from mutuals and other shekel-denominated investments in September and October.