Israeli Shekel Weakens After Bank of Israel Holds Rate Steady

By Alisa Odenheimer

Sept. 23 (Bloomberg) -- The Israeli shekel fell against the dollar, snapping a three-day gain, after the Bank of Israel kept its benchmark interest rate unchanged yesterday.

The Israeli currency weakened by as much as 0.7 percent to 3.4196, and was trading at 3.4036 as of 9:34 a.m. in Tel Aviv, from 3.3968 yesterday.

Bank of Israel Governor Stanley Fischer left the rate at 4.25 percent, after four increases in as many months, on concern that the global financial crisis will further constrain the country's flagging economic growth.

Sixteen out of 18 economists surveyed by Bloomberg before the decision had predicted no change, while the other two forecast a quarter-point increase.

To contact the reporter on this story: Alisa Odenheimer in Jerusalem at aodenheimer@bloomberg.net.