Shekel plunges to weakest against dollar since April 2020

• Author: Bar Lavi
• Published date: 29 September 2022
• Publication title: Globes (Rishon LeZion, Israel)

Yesterday, the Bank of Israel set the representative shekel-dollar rate up 1.347% from Friday before the Rosh Hashana holiday, at NIS 3.536/$, and the representative shekel-euro rate was set 0.751% lower at NIS 3.385/€. This is the weakest that shekel has been against the dollar since April 2020, at the start of the economic crisis caused by the Covid pandemic, when the dollar was also strong as investors sought a safe haven currency. The shekel has weakened by over 12% against the dollar since the start of the year

The dollar index is currently at its strongest in 20 years and the US currency has appreciated by 19% since the start of 2022 against the basket of major international currencies - the strongest the dollar has been for 20 years. Relatively speaking the shekel has weakened less against the dollar than other currencies.

In particular sterling is reeling and over the past week the UK currency has reached a new low against the US dollar and is currently trading at $1.05/£. Sterling has been hit by investor dissatisfaction with the new UK government's sharp tax cuts.

Reason for weakening of the shekel

Beyond the strengthening of the US currency worldwide, which has also affected the shekel, the weakening of the Israeli...