Shekel slump gains momentum

• Published date: 24 May 2023
• Author: Aharon Katz
• Publication title: Globes (Rishon LeZion, Israel)

Yesterday, the Bank of Israel set the representative shekel-dollar rate up 0.575% from Monday, at NIS 3.672/$, and the representative shekel-euro rate was set 0.129% higher at NIS 3.958/€

The shekel has continued to weaken even after the government passed the 2023-2024 budget this morning. Yesterday the shekel weakened after IDF Chief of Staff Lt. Gen. Herzi Halevi told the Herzliya Conference that there were negative developments in Iran that could prompt IDF actions.

Psagot chief economist Ori Greenfeld explains the plunge in the shekel today as, "Increased uncertainty due to the Chief of Staff's remarks and the approval of the budget, which puts the issue of the judicial overhaul back on the table. In the market, when uncertainty increases, this is reflected in the risk premium, as we see now in the shekel-dollar exchange rate. As certainty returns, it is likely...