The shekel is weakening today against the dollar and against the euro after the Bank of Israel has intervened on the foreign exchange market to purchase significant amounts of foreign currency, market traders have told "Globes." In morning inter-bank trading the shekel-dollar exchange rate is up 0.23% at NIS 3.460/$ and up 0.31% against the euro at NIS 3.837/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.087% from Tuesday at NIS 3.452/$, and the representative shekel-euro rate was set down 0.300% at NIS 3.825/€.
The Bank of Israel has been purchasing large amounts of foreign currency in recent months as part of a policy to counter the effect of speculators. When new Governor Prof. Amir Yaron took office in December 2018, he ended the policy of his predecessors of purchasing foreign currency to weaken the shekel and kelp exporters.
However, the Bank of Israel purchased nearly $4 billion in the last quarter of 2019 including $2 billion in December. The Bank of Israel has blamed low-inflation on the strength of the shekel, which reduces prices on imported goods and services including oil.
Last week, Bank of America Merrill Lynch recommended that investors go short on the shekel because the Bank of Israel is determined to weaken it after it has been the number two currency in long positions in recent months.
Published by Globes, Israel business news - en.globes.co.il - on January 23, 2020
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