Shekel at strongest for four months against dollar

Shekel Photo: ASAP Creative

Over the past month, the Israeli currency has stabilized beneath the NIS 3.50/$ level - very slightly weaker than before the crisis.

The shekel is strengthening today against the dollar and weakening against the euro. In afternoon inter-bank trading the shekel-dollar exchange rate was down 0.41% at NIS 3.432/$ and up 0.27% against the euro at NIS 3.876/€.

Yesterday, the Bank of Israel set the shekel 0.029% lower from Friday at NIS 3.446/$, and the representative shekel-euro rate was set 0.060% higher, at NIS 3.865/€.

The shekel is trading at its strongest for four months against the dollar as the Israeli economy gets going again after most restrictions from the lockdown have been eased. However, a new rise in infections and the continuing spread around the world of Covid-19 makes it unclear how strong the economic rebound will actually be.

In his weekly survey Leader Capital Markets macroeconomist Yonatan Katz observes that consumption through credit card payments in Israel in June so far is 11% below what it was on the eve of the Covid-19 crisis. Following the unexpectedly low May Consumer Price Index (CPI) reading of 0.3%, Katz expects the CPI to fall a further 0.1% in June but sees inflation rising later in the year as economies recover, oil prices rise and governments inject money into their economies.

Over the past month, the Israeli currency has stabilized beneath the NIS 3.50/$ level, very slightly weaker than before the crisis. Last week Bank of Israel Governor Prof. Amir Yaron warned that the shekel is still liable to be volatile with high risks persisting and hinted at potential depreciation. However, last month the Bank of Israel itself purchased $2.623 billion in foreign currency to weaken the shekel.

Published by Globes, Israel business news - en.globes.co.il - on June 23, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Shekel Photo: ASAP Creative
Shekel Photo: ASAP Creative
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