The dollar continues its journey south, and yesterday it fell to a level of NIS 3.23 – the lowest level since July 2018. The continued decline is somewhat surprising, since according to expectations, the decision to go to the polls was supposed to stimulate the dollar as in previous cases.
If the dollar continues to weaken and reaches the level of NIS 3.22, it will fall to the level it was in 1996, when the last low was recorded in the exchange rate. In real terms, this is an even lower effective exchange rate.
The weakness of the dollar against the shekel is mainly explained by its weakness in the world. It weakened not only against the shekel, but also against other currencies, led by the euro. According to the manufacturers’ data, the collapse of the dollar in 2012 led to the dismissal of 1,050 workers and severely affected exports abroad.
On the other hand, the Bank of Israel continues its policy of intervening in the trading rooms, and its response to developments is expected and appropriate to investors’ expectations. The Governor of the Bank of Israel, Prof. Amir Yaron, announced last week that the Central Bank will continue to intervene in the currency markets as long as necessary and that the high currency reserves do not block such intervention. During trading yesterday, the Bank of Israel bought several hundred million dollars to curb the deterioration of the dollar.
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