Shekel gains halt on political compromise doubts

Shekel gains halt on political compromise doubts

Shekel gains halt on political compromise doubts

After strengthening by 2% against the dollar over the past few days, the shekel is weakening slightly today against the dollar and against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate is up 0.08% at 3.658/$ and the shekel-euro rate is up 0.18% at NIS 3.925/€.

Yesterday, the Bank of Israel set the representative shekel-dollar rate down 1.615% from Tuesday, at NIS 3.655/$, and the representative shekel-euro rate was set 1.28% lower at NIS 3.918/€.

The change in direction on the forex market came after coalition chairman MK Ofir Katz (Likud) told YNet Radio that the judicial overhaul compromise talks will fail and the government’s legislation will be put back on the table.

Prico Risk Management, Finance and Investments CEO Yossi Fraiman says, “The uncertainty regarding the future of the mediation talks at the President’s Residence is causing upheaval in the local capital market. Jeopardizing Israel’s economic strength could harm the general public, who will be required to pay more due to the depreciation and even lose their jobs with the cuts in many businesses. Without an agreement, and with a cloud of uncertainty hanging in the air the dollar could reach a level of NIS 3.8/$ or even more, which would lead to price rises and increased inflation, followed by interest rate hikes. In our estimation, the roller coaster in the foreign exchange market is expected to continue, and the potential for appreciation remains limited.”

IBI Investment House chief economist Rafi Gozlan says, “Belligerent statements alongside softened statements will probably continue to accompany us as long as there is no agreed compromise or withdrawal from the legislation, and this is seen as part of the negotiations. The market is not overly excited, and this is obviously affected by the identity of the speakers and reacts with a slight weakening of the shekel after the rapid appreciation in recent days In general, the market is waiting for actual developments, and the first test will be around the committee for appointing judges.”

Published by Globes, Israel business news – – on June 8, 2023.

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