The shekel is strengthening sharply following President Isaac Herzog’s announcement that a compromise agreement is close between the coalition and opposition on the government’s planned judicial reform. In afternoon inter-bank trading, the shekel-dollar rate is down 1.98%, at NIS 3.592/$, and the shekel-euro rate is down 1.68%, at NIS 3.822/€.
On Friday, the Bank of Israel set the representative shekel-dollar rate up 0.604%, at NIS 3.664/$, and the representative shekel-euro rate was set 0.406% higher at NIS 3.884/€.
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Herzog: We’re close to agreement on judicial reform
The shekel depreciated by 6% against the US dollar in February, and has been trading at its weakest level in three years, due to the political rift caused by the government’s judicial overhaul plans, although the Israeli currency stabilized somewhat in the first few days of March.
Citi described the shekel as being under pressure from “local political noise” and predicted that the Israeli currency could depreciate as far as NIS 3.95/$. Bank of America analysts wrote. “Political noise in Israel doesn’t usually impact Israeli assets or economic policy but we believe this time is different. Local sentiment has the potential to cause domestic investors to shift their portfolios away from shekel-based assets.”
However, President Isaac Herzog’s comments that “We are closer than ever to the possibility of an agreed outline. Behind the scenes, there are understandings on most of the issues,” seems to have been a game-changer on the foreign currency market.
Published by Globes, Israel business news – en.globes.co.il – on March 5, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.
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