The shekel has been weakening today against the dollar and against the euro. In morning inter-bank trading, the shekel-dollar exchange rate is up 0.85% at 3.747/$ and the shekel-euro rate is up 0.75% at NIS 3.997/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate up 0.162% from Tuesday, at NIS 3.715/$, and the representative shekel-euro rate was set 0.364% lower at NIS 3.967/€.
After gaining on Tuesday, the shekel has resumed its slide against the dollar and is trading against the US dollar at levels not since the start of the Covid pandemic in March 2020, as political and security uncertainties weigh on the Israeli currency despite Israel's strong macroeconomic data.
The shekel weakened by 2.6% against the dollar in May and earlier this week Bank of Israel Governor Prof. Amir Yaron warned that the depreciation of the Israeli currency is fueling inflation in Israel and could result in more rate hikes. The shekel has weakened by 6% against the dollar since the start of the year.
Earlier this week Goldman Sachs cut its shekel forecast for the short to medium term over concerns that the ongoing judicial overhaul saga will adversely affect the Israeli currency. Over the next three months Goldman Sachs expects the shekel to remain around the NIS 3.70/$ mark and thereafter over the next year around NIS 3.60/$. In its previous forecast, Goldman Sachs had predicted that the shekel would move between NIS 3.40-3.50/$ over the next year.
Published by Globes, Israel business news - en.globes.co.il - on June 1, 2023.
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