Shekel Slumps on Grim Economic Data, Spurring Rate Cut Expectations

• Shekel weakens against dollar and euro after dire economic growth data showing 20% GDP contraction • Weakness could prompt Bank of Israel to further cut interest rates at next week's meeting • Shekel remains volatile due to exporters selling foreign currency along with low tourism demand • Additional borrowing may be needed with credit rating downgrade, challenging Ministry of Finance • Interest rate cuts could continue to try stimulating economy after catastrophic Q4 performance