The shekel is strengthening today against the dollar and stable against the euro. In afternoon inter-bank trading, the shekel was down 0.58% against the dollar at NIS 3.231/$ and up 0.06% against the euro at NIS 3.959/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate 0.309% higher from Friday, at NIS 3.251/$, and the representative shekel-euro rate was set 0.363% lower, at NIS 3.957/€.
The Bank of Israel reportedly again intervened in foreign currency trading today to purchase hundreds of millions of dollars in foreign currency to moderate the strengthening of the shekel. This happened after the exchange rate fell below NIS 3.23/$, the strongest the Israeli currency has been against the dollar since November 1996.
Bank Hapoalim economists said, "The market is waiting to see what will be the policies of the new US administration. If, for example, they adopt very expansive policies, then the dollar will continue to weaken on world markets."
"The closed skies in Israel improve the situation of the shekel. The profit of institutional investors on overseas stock exchanges also strengthens the shekel because they hedge the currency."
"But the Bank of Israel is the biggest player on this market and since the start of the year it has already bought $17 billion. Appreciation pressures will develop when the economy opens up and we will see Israelis taking their money abroad. Share prices also won't continue to rise at the same rate as recent months. We are assuming a stabilization in the exchange rate next year although the Bank of Israel may need to continue buying foreign currency in the short term."
Published by Globes, Israel business news - en.globes.co.il - on December 22, 2020
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