Shekel gains amid Bank of Israel inaction

Shekel  / Photo: Shutterstock

The shekel remains below the psychologically important barrier of NIS 3.50/$ against the dollar, at levels not seen since March 2018.

The shekel is continuing to strengthen today against the dollar and against the euro. In early afternoon inter-bank trading, the shekel-dollar exchange rate is down 0.40% against the dollar at NIS 3.4799/$ and down 0.40% against the euro at 3.8916/€.

Yesterday, the Bank of Israel set the shekel-dollar representative rate unchanged at NIS 3.494/$ from Monday, and set the shekel-euro rate up 0.190% at 3.908/€.

The shekel remains below the psychologically important barrier of NIS 3.50/$ against the dollar at levels not seen since March 2018, albeit slight above last week's lows. The shekel is below NIS 3.90/€ at levels not seen since April 2017.

Moreover, unlike his predecessors, Dr. Karnit Flug and before her Prof. Stanley Fischer, current Governor Prof. Amir Yaron shows no inclination to intervene in forex trading by purchasing large amounts of foreign currency to weaken the shekel and help exporters, when the rate falls below NIS 3.50/$.

Last week Yaron made do with an exceptional statement that the interest rate is unlikely to rise any time soon. This did have the effect of temporarily halting the shekel's appreciation.

Amir also stated that there are, "Additional tools are at our disposal, should they be needed." Many feel that they are needed to stop the shekels gains but it remains to be seen whether Yaron will be one of them.

Published by Globes, Israel business news - en.globes.co.il - on August 7, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Shekel  / Photo: Shutterstock
Shekel / Photo: Shutterstock
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