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Shekel-dollar rate retreats further
The exchange rate is down on its fourth consecutive day.
Michal Yoshai 17 Apr 08 12:23
The shekel-dollar exchange rate is lower again today, after a three day stretch which saw the rate drop 3.4%. By mid-day, the shekel-dollar exchange rate had fallen 0.3% to NIS 3.4665/$, and the shekel-euro exchange rate was down 0.17% to NIS 5.5311/€.
The move has been attributed more to strength in the shekel - against several major currencies - than to weakness in the dollar. Remarks by Governor of the Bank of Israel Prof. Stanley Fischer on Sunday have essentially turned into a self-fulfilling prophecy. Fischer warned on Sunday that the shekel would continue to display its strength over the mid to long term. Despite later explanations that emphasized his outlook of mid to long term, market participants reacted much sooner.
The finance ministry has also followed foreign exchange movements, and reported yesterday that it has hedged about $1.2 billion of dollar-denominated debt to protect against future volatility. The ministry entered forward contracts valued at $700 million, and has also entered swap agreements.
Foreign currency trading firm Easy Forex pointed out that March CPI figures have also influenced recent trading. Figures released on Tuesday, which showed a higher than expected 0.3% rise, increased the chances that the Bank of Israel would leave rates unchanged on the 28th of the month.
Yesterday's representative shekel-dollar rate was set at NIS 3.477/$, a drop of 0.34%, while the representative shekel-euro rate was set at NIS 5.5406/€, which actually represented an increase of about 0.3% over the previous day's official rate.