The shekel is again strengthening against the dollar and against the euro today. In afternoon inter-bank trading, the shekel exchange rate was down 0.92% against the dollar at NIS 3.062/$ and down 1.31% against the euro at NIS 3.468/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.387% from Monday, at NIS 3.090/$, and the representative shekel-euro rate was set 0.26% lower at NIS 3.514/€.
The dollar may be dominant on global forex markets, at a 16-month high against the world's major currencies, due to concerns about rising inflation, but that isn't stopping the shekel. The Israeli currency is at a new 26-year peak rate against the dollar and an all-time high against the euro.
When the shekel fell to NIS 3.08/$ last week, the Bank of Israel intervened aggressively by purchasing foreign currency to moderate the appreciation of the shekel and assist exporters.
But the stronger shekel is making imports cheaper and in this way insulating Israel from the higher inflation that is plaguing other Western economies. While annual inflation in the US is over 6% and over 4% in the UK, inflation in Israel over the past 12 months has been a more manageable 2.3% - within the Bank of Israel's annual target range of 1%-3%.
Published by Globes, Israel business news - en.globes.co.il - on November 17, 2021.
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