Shekel money bills.
(photo credit: REUTERS)
Bloomberg news on Thursday dubbed the Israeli shekel the 'World’s Worst Currency' after a roller-coaster week saw it climb 2.1% and, following an intervention by the Bank of Israel, drop .8%.
The shekel had fallen to 3.7754 on the dollar, making it the most depreciated currency of the 30 major currencies tracked by Bloomberg experts globally.
The up-and-down followed remarks made by Bank of Israel Governor Karnit Flug on Monday
at the first-ever quarterly monetary press conference, which raised doubts in the market about how serious the bank was in defending the shekel's exchange rate. BOI was forced to intervene and purchase approximately $200 million to quell the spike.
“It’s the Bank of Israel against the market,” Yariv Shalev, a currency dealer at Mercantile Discount Bank in Tel Aviv, told Bloomberg. “The central bank will continue to buy but we don’t see the dollar/shekel coming back to levels we’ve seen in the last week. The market does not believe in the interventions, and it knows the Bank of Israel is very limited,” he added.
Bloomberg's choice of the term 'worst' to describe the currency was unusual, particularly at a time when the future of the euro is in doubt and the Russian ruble is in the toilet; the merit of a currency is seldom linked to small spikes or dips in its value.