Rapidly depreciating shekel at 18-month low against US dollar

This is what everyone who is entered in the records shall pay: a half-shekel by the sanctuary weight—twenty giera to the shekel —a half- shekel as an offering to Hashem.

Exodus

30:

13

(the israel bible)

May 5, 2022

< 1 minute

The depreciating shekel against the US dollar carries on. In inter-bank day trading, the exchange rate of the shekel rose 0.42% against the US dollar at NIS 3.366/$. It climbed 0.25% against the EUR at NIS 3.537/€, reports Globes.

On Monday, the Bank of Israel determined the shekel-dollar rate went up 1.055% from Friday to NIS 3.352/$. The representative shekel-euro rate was set at an 0.441% increase to NIS 3.528/€.

The US dollar is the strongest it has been in world markets since 2002 in lieu of the US Federal Reserve tightening monetary policies. Along with a recently announced rate hike of 0.5% by the Fed on Wednesday, the dollar is acting as a safe-haven currency while the Russia-Ukraine war continues to infect the global economy with doubt.

Since the beginning of 2022, the shekel depreciated 7.8% against the US dollar. This includes 4.4% in April. Compared to the basket of the world’s top currencies, the shekel has been 2.7% weaker since the beginning of 2022.

The shekel is anticipated to continue weakening while the Federal Reserve continues raising interest rates to fight inflation, and the instability propelled by the Russia-Ukraine conflict continues. Additionally, stock market dips have compelled Israel’s institutional investors to purchase foreign currency and sell shekels to hedge their foreign investments. Despite the currency’s weakening, Bank Hapoalim economists say the fundamental factors supporting the shekel’s strength are unchanged. However, in the short term, the Stock Market’s direction will be the determining factor.

A weakening shekel will lead to a rise in imported inflation. Bank Hapoalim economists raised their inflation forecast for Israel in 2022 to 2.9%. This forecast is still below the 3.5% that the Consumer Price Index rose over the past year.

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