The shekel is strengthening today against the dollar for the fifth straight trading session and is also strengthening against the euro. In early afternoon inter-bank trading the shekel-dollar exchange range was down 0.51% against the dollar at NIS 3.282/$ and down 0.68% against the euro at NIS 3.898/€, Trend reports with reference to Globes.
Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.302% from Tuesday, at NIS 3.299/$, and the representative shekel-euro rate was set 0.440% up, at NIS 3.925/€.
The shekel has been gaining against the dollar for the past week. As the US prints more money for President Biden’s stimulus package the dollar has weakened against the world’s major currencies. However, today the dollar is slightly stronger worldwide but not as strong as the shekel.
Yesterday the Bank of Israel revealed that it bought $2 billion in foreign currency in March in efforts to temper the strengthening of the shekel, bringing its first quarter foreign currency purchases to a massive $13.7 billion. This is nearly half of the planned $30 billion purchasing program announced in January, although Governor Prof. Amir Yaron has since clarified that the program may exceed $30 billion.
Earlier in the week the IMF raised Israel’s growth forecast to 5% in 2021 from 4.1%, due to the opening up of the economy following the successful vaccination campaign.
Bank Hapoalim chief economist Victor Bahar said, “The Bank of Israel bought $2 billion in March and $13.7 billion since the start of the year. That leaves the Bank of Israel to buy about $1.8 billion every month until the end of the year. In our estimations, this amount should suffice to prevent the strengthening of the shekel in the coming months. It should be taking into account that the opening of the skies will reduce somewhat the appreciation pressures.”
