Last update - 00:00 23/03/2008
TASE opens strong as traders expect BoI to cut interest rates
By Haaretz Service
The Tel Aviv Stock Exchange opened strong on Sunday as brokers expect the Bank of Israel to drop interest rates. Stocks are also rising due to Wall Street's strong showing on Friday.
The TA-25 index rose 1.9 percent early Sunday, while the TA-100 has risen 1.7 percent.
On Friday, the NASDAQ and Dow Jones rose 2.2 percent after the U.S. Federal reserve said that it would loan investment companies $75 billion in order to survive the sub-prime credit crisis.
If that was not enough, the Fed also agreed to accept sub-prime mortgage backed bonds - the very bonds that led investment companies such as Bear Stearns to go bankrupt - as collateral for the hefty loans.
Bank of Israel Governor Stanley Fischer is expected to drop interest rates only 0.25 percent and not 0.5 percent as was initially expected. Last week, Fischer announced that the Bank of Israel would purchase $10 billion in the next two years in order to strengthen the dollar against the shekel.
In light of this decision, it appears that Fischer will no longer need to make a steep interest cut in order to strengthen the dollar.
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