After a turbulent day yesterday, the foreign exchange market is more stable this morning, with the shekel weakening somewhat against the major currencies.
Yesterday, the shekel-dollar exchange rate slid to its lowest level in 25 years, reaching NIS 3.10/$. The shekel-euro rate reached NIS 3.60/€. The rates subsequently began to rise, and the Bank of Israel's representative shekel-dollar rate was eventually set at NIS 3.13/$, while the representative shekel-euro rate was set at NIS 3.63/€. The assessment on the market was that the Bank of Israel had intervened in trading. The central bank itself did not comment.
The shekel-dollar rate is currently at NIS 3.1387/$, 0.28% above yesterday's representative rate, while the shekel-euro rate is at NIS 3.6347/€, 0.12% above yesterday's representative rate.
Commenting on events on the foreign exchange market and the Bank of Israel's possible response, Bank Leumi chief economist Gil Bufman and Leumi Capital Markets head of market strategy Kobi Levi wrote in a market review yesterday, "If the Bank of Israel again intervenes in the market either through words or actual purchases, at a timing of its own choice, then it would seem that the undeclared target would be 'just under' NIS 3.20/$, in the absence of any major changes in the dollar on world markets.
"If the Bank of Israel very much surprises us and continues to stay completely out of the foreign currency market - something which would need explanation about a change in declared policy - then the way will be paved in the short term for an appreciation below NIS 3.10/$."
Published by Globes, Israel business news - en.globes.co.il - on November 3, 2021.
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