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Shekel weakens sharply as markets fall

  • March 05, 2021

The shekel is weakening today against the dollar and against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate was up 0.77% against the dollar at NIS 3.312/$ and the shekel-euro rate was up 0.50% at NIS 3.986/€.

Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.364% from Tuesday, at NIS 3.287/$, and the representative shekel-euro rate was set 0.038% down, at NIS 3.966/€.

The Israeli currency is trading at its weakest against the dollar since late November as world stock markets continue to fall and Israeli institutional investors buy foreign currency to cover their exposure to Wall Street and other overseas markets. The stock market in New York has been falling due to rising US government bond yields. At the end of 2020, 21.4% of the portfolios of Israel institutional investors was in foreign currency, including hedging.

Bank of Israel Governor Prof. Amir Yaron told CNN earlier this week that he is determined to push ahead with the plan to buy $30 billion in foreign currency this year, even if the shekel continues weakening. He also said he is no hurry to raise interest rates because of his unemployment, even if inflation is rising – both comments that could contribute towards the ongoing depreciation of the shekel.

Published by Globes, Israel business news – en.globes.co.il – on March 4, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021


Article source: https://en.globes.co.il/en/article-1001362912#utm_source=RSS

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