The dollar strengthened again this morning: the American currency rises by 0.9% to the level of NIS 3.64. The euro rises by 0.6% to the level of NIS 3.85.
The foreign exchange market trembled last week, amid the coup d’état and insinuations about possible damage to the independence of the Bank of Israel due to the interest rate hikes, which led Prime Minister Benjamin Netanyahu to issue a clarification on the issue.
At the beginning of the week, the shekel lost 2% against the dollar, despite the Bank of Israel’s sharp interest rate hike, and recorded a three-year low. Citigroup even warned that the Israeli currency would drop by 8% to the level of NIS 3.95 per dollar. “The currency continues to be under pressure due to the political noise,” Citi strategists wrote.
However, later this week the shekel went up against the dollar, and yesterday traded at a level of 3.62 shekels to the dollar.
On Wednesday, against the background of the high volatility in the foreign exchange market, the Governor of the Bank of Israel convened the Committee for Financial Stability for an extraordinary discussion. At the government meeting on the budget last night, the Governor answered a question about the possibility of damage to the economy due to the coup d’état, saying: “It could start in one day and produce a very serious damage In the Israeli economy it will be very difficult to stop.”