The shekel is weakening sharply against the world's major currencies for the second successive day. In afternoon inter-bank trading, the shekel is 0.84% higher against the dollar at NIS 3.728/$ and 1.06% higher against the euro at NIS 4.014/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate up 0.928% from Monday, at NIS 3.697/$, and the representative shekel-euro rate was set 0.544% higher at NIS 3.972/€.
Prico Risk Management, Finance and Investment CEO Yossi Fraiman says, "Concerns about an escalation on the Syrian front and estimates that the budget deficit might rise above 8% and endanger Israel's credit rating have dragged the shekel-dollar exchange rate above NIS 3.70/$.
However, Fraiman adds that shekel losses could be moderated by Israel exporters and companies needing shekel for salary and tax payments at the beginning of the month.
The Bank of Israel's interest rate decision is due next Monday, and Bank of Governor Prof. Amir Yaron has previously stressed that the stability of the financial markets, especially the foreign exchange market, is a main component in the question of whether to continue easing monetary policy. Thus the current depreciation of the shekel significantly reduces the likelihood of another rate cut on Monday.
Published by Globes, Israel business news - en.globes.co.il - on April 3, 2024.
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