The shekel is weakening today against the dollar and against the euro. In afternoon inter-bank trading, the shekel-dollar rate is up 0.86%, at NIS 3.564/$, and the shekel-euro rate is up 1.10%, at NIS 3.867/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.647% from Monday, at NIS 3.534/$, and the representative shekel-euro rate was set 0.211% lower at NIS 3.826/€.
The shekel is weakening after several days of sharp appreciation due to Prime Minister Benjamin Netanyahu's decision to pause the judicial overhaul. Analysts attribute today's depreciation of the shekel to Netanyahu's seeming determination to eventually push ahead with the judicial reform after rebuffing US President Joe Biden's suggestion that Israel should not "continue down this road."
The weakening of the shekel today is likely to increase inflation by pushing up the price of government controlled fuel in the end of month price revision. Shekel depreciation also increases the likelihood of a 0.5% rate hike next week by the Bank of Israel rather than the expected 0.25%.
Published by Globes, Israel business news - en.globes.co.il - on March 29, 2023.
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