Shekel tumbles after IDF chief's Iran remarks

Shekel depreciates credit: Tali Bogdanovsky
Shekel depreciates credit: Tali Bogdanovsky

The shekel has been sharply depreciating after Lt. Gen Herzi Halevi warned of negative developments in Iran that could lead to action.

Just as the forex markets began to calm after yesterday's Bank of Israel rate hike, IDF Chief of Staff Lt. Gen. Herzi Halevi reignited it with comments about Iran.

This afternoon, the Bank of Israel set the representative shekel-dollar rate up 0.575% from Monday, at NIS 3.672/$, and the representative shekel-euro rate was set 0.129% higher at NIS 3.958/€. Since then in after-hours trading the shekel-dollar rate is up a further 0.635% at 3.695/$ and the shekel-euro rate is up 0.571% at 3.980/€.

Yesterday Minister of Defense Yoav Gallant told the Herzliya Conference about the Iranian Revolutionary Guard's latest plans and the IDF Head of Military Intelligence General Aharon Haliva warned that a mistake by Hezbollah leader Hassan Nasrallah could lead to war. Today Gen. Halevi speaking to the Herzliya Conference sent a direct message to Iran. "There are negative developments on the horizon that could lead to action," said Halevi, mentioning that Iran is moving forward more than ever towards enriching uranium.

Estimates are that the Iranian regime is just six months away from enriching uranium to 90% - a level that could supply nuclear weapons. "Iran is 1,500 kilometers away," said Halevi. "The IDF knows how to fight in its back yard and we need to build capabilities."

Following Halevi's remarks the shekel began weakening sharply. A market trader told "Globes" that the shekel began tumbling after Halevi's comments were translated to English and appeared in news reports, spooking investors.

Prico Risk Management, Finance and Investments CEO Yossi Fraiman told "Globes, "Concerns about an unfolding event with Iran raises uncertainty and fear of a security crisis." He points out that the combination of fear in the US that the US debt talks have run aground added to the security concerns "Creates a very high demand for foreign currency from foreign investors."

Published by Globes, Israel business news - - on May 23, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Shekel depreciates credit: Tali Bogdanovsky
Shekel depreciates credit: Tali Bogdanovsky
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