Shekel pushes dollar to new low

Shekels Photo: Shutterstock

The Bank of Israel purchased only $100 million in foreign currency in December and sits on the sidelines as the shekel strengthens.

The shekel is strengthening against the dollar and against the euro this afternoon. In inter-bank trading, the shekel-dollar exchange rate was down 0.24% from yesterday's representative rate at NIS 3.421/$, and down 0.65% against the euro at 4.087/€.

Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.436% from yesterday's exchange rate at NIS 3.429/$ and set the shekel-euro rate up 0.127% at 4.114/€.

The shekel has pushed the dollar to new lows not seen since August 2014 during Operation Protective Edge in Gaza, which greatly weakened the shekel. Yesterday the Bank of Israel announced that the interest rate would remain unchanged at its historic low of 0.1%. The interest rate has been unchanged since March 2015.

Despite the strength of the shekel, the Bank of Israel seems to have abandoned its policy of purchasing foreign currency in order to weaken the shekel and help exporters. The Bank of Israel reported that it only purchased $100 million in foreign currency, a relatively modest sum, in December 2017. Israel's foreign exchange reserves rose to $113 billion at the end of 2017, up from $98.47 billion at the end of 2016.

Published by Globes [online], Israel business news - www.globes-online.com - on January 11, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Shekels Photo: Shutterstock
Shekels Photo: Shutterstock
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