Shekel strengthens as Bank of Israel avoids further monetary easing

USD-ILS declined sharply in trading yesterday after Bank of Israel (BoI) kept its policy rate on hold at 0.1% and the MPC's remarks suggested that the bank is not actively considering negative interest rates or fresh QE. 

The MPC reminded investors of such possibilities by way of verbal intervention as expected, and highlighted shekel appreciation as a major problem, but its economic assessment is too bullish to permit implementing new unconventional policies at this stage, says Commerzbank.
As a consequence, USD-ILS fell sharply to 3.77 yesterday from 3.82 at the end of last week.

USD-ILS is expected to hover in the range of 3.77 to 3.82 through end-2015, but likely to decline further to 3.65 levels during 2016, estimates Commerzbank.