Shekel weakens as markets continue freefall

Shekel Photo: ASAP Creative

Strong demand for foreign currency by Israeli financial institutions and investors will persist as global stock markets continue to fall.

The shekel is weakening today against the dollar and against the euro. In early afternoon inter-bank trading the shekel-dollar exchange rate was up 2.86% at NIS 3.6999/$ and up 2.08% against the euro at NIS 3.9512/€.

On Friday, the representative shekel-dollar rate was set 2.335% lower at NIS 3.597/$, and the representative shekel-euro rate was set 2.661% lower, at NIS 3.871/€.

The Israeli currency rebounded strongly at the end of last week after 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 created 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.

This demand is expected to persist as the week has opened with strong falls on stock markets in Asia, Europe and the Tel Aviv Stock Exchange. Wall Street is also expected to open sharply down after the US Congress failed to pass a stimulus package.

Published by Globes [online], Israel business news - en.globes.co.il - on March 23, 2020

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

Shekel Photo: ASAP Creative
Shekel Photo: ASAP Creative
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