The Tel Aviv Stock Exchange ends the week with gains – despite the tightening of the closure and the riots in the US. At the end of the trading day yesterday, gains were recorded in all the leading indices up to a level of 1.5% (Tel Aviv 35). Oil crossed the $ 50 threshold for the first time since February – before the corona began to affect the economy.
Yields on 10-year US government bonds have risen above 1% – for the first time since March. The World Bank predicts that in the coming year there will be growth of about 4% worldwide, after a contraction of 4.3% in 2020. In the Middle East, economies have shrunk by 5% (including Israel), and will grow by 2.1% in the coming year. The close drops to 1.9%, compared to 2.1% before the appearance of the corona.
Meanwhile, the Bank of Israel announced yesterday that it had purchased NIS 4.4 billion in foreign currency in December, according to data published by the Bank. The Bank’s foreign exchange reserves totaled more than $ 173 billion at the end of 2020 – an increase of about 6.3 billion compared to the end of November and a jump of nearly 40% compared to the end of 2019, when the foreign exchange balance amounted to 126 billion. In total, the balances are equal to 43.3% of GDP.
Despite the massive purchase of foreign currency by the Bank of Israel, assuming that this action will help exporters cope with the strengthening shekel, the dollar continues to plunge and trades below last night below NIS 3.2 – a low of about half a jubilee. The dollar crisis is not just in relation to the shekel but to most of the currencies in the world, and is largely due to the massive printing of the currency in order to fund economic aid programs worth a trillion dollars.
There is also uncertainty in the economic world in light of the impending change of government in the US, as this week it became clear that Democrats will control not only the White House but also both houses of Congress (the House of Representatives and the Senate).
The Bank of Israel also publishes data on credit facilities for the banking system (long-term loans), which show that the balance of long-term loans to the banking system for credit to small businesses amounted to NIS 19.6 billion at the end of December – an increase of 20% within a month 16 Since the first time the long-term credit facility was activated, last April, in the amount of NIS 1.2 billion. The balance of purchases of government bonds at the end of the year was NIS 46.2 billion.
