The shekel has been weakening sharply today against the dollar and against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate is up 1.11% at 3.678/$ and the shekel-euro rate is up 1.17% at NIS 4.028/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate 0.359% higher from Monday, at NIS 3.638/$, and the representative shekel-euro rate was set 0.734% higher at NIS 3.982/€.
The shekel began depreciating yesterday after Bank of Israel Governor Prof. Amir Yaron sent a sharply worded letter to Prime Minister Benjamin Netanyahu expressing his resolute opposition to proposed legislation requiring banks to pay interest on consumer current accounts. The bill, approved by the ministerial committee on legislation last week, would have required banks to pay interest at a minimum rate set by the Bank of Israel Governor and approved by the Minister of Finance. Yaron made it clear that such a law would be a blow to the independence of the Bank of Israel.
The bill was due to receive a preliminary reading in the Knesset this morning but was removed from the agenda at the last minute
However, investors remain wary on the Israeli currency as the bill has been suspended rather than shelved. At the same time the government has repeated its determination to forge ahead with its plans to reform the judiciary.
Published by Globes, Israel business news - en.globes.co.il - on June 28, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.