Shekel gains continue as markets rally

Shekel Photo: ASAP Creative
Shekel Photo: ASAP Creative

The shekel was trading at NIS 3.46/$ at the beginning of the month depreciated to NIS 3.86/$ two weeks ago but is now moving strongly back towards its pre-crisis levels.

The shekel is again strengthening today against the dollar and against the euro. In afternoon inter-bank trading the shekel-dollar exchange rate was down 0.80% at NIS 3.558/$ and down 1.50% against the euro at NIS 3.901/€.

Yesterday, the Bank of Israel set the representative shekel-dollar rate 0.333% lower than Friday's rate, at NIS 3.586/$, and the representative shekel-euro rate was unchanged at NIS 3.965/€.

The foreign exchange market remains volatile but has lost the frenzy of the past month. Investors worldwide seem more optimistic about the economic havoc being wrought by the coronavirus pandemic as global markets continue to rally and the hope is that stocks have seen their bottom prices. The Tel Aviv 35 Index is currently 2.96% higher at 1335.01 points, still 30% below its level a month ago.

As markets rise, the shekel has been rebounding strongly. Earlier this month the shekel was boosted when the Bank of Israel said that it will provide up to $15 billion in liquidity to the banks from its $130 billion foreign exchange reserves. The program will relieve the shortage of dollars created in the banking system by demand from banks and financial institutions to increase their collateral for overseas positions and by purchases by financial institutions forced to reduce their foreign currency hedges on overseas investments in derivatives, following a steep decline in the value of these investments. However, as those investments regain some value anyway, the pressure is taken off the shekel.

The shekel was trading at NIS 3.46/$ at the beginning of the month depreciated to NIS 3.86/$ two weeks ago but is now moving strongly back towards its pre-crisis levels.

Published by Globes, Israel business news - en.globes.co.il - on March 31, 2020

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

Shekel Photo: ASAP Creative
Shekel Photo: ASAP Creative
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