Posted by: youngragingbull | May 13, 2013

Bank of Israel cuts key rate, to buy currencies

The Bank of Israel unexpectedly cut its benchmark interest rate by a quarter point to 1.5% on Monday and announced plans to buy foreign currencies in an effort to check the rise of the shekel.

The moves come after the shekel rose 2.4% in the past month and 5.4% over the last three months, the central bank said, with the rise fueled by the launch of natural gas production from Israel’s Tamar gas field; interest-rate cuts by central banks around the world, particularly the European Central Bank; and continued quantitative easing programs in several major economies around the world.

The shekel fell 0.9% versus the U.S. currency to trade at 3.5930 per dollar in recent action. It traded at 4.6660 per euro, a fall of 0.7%.

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