Shekel weighed down by doubts as dollar rises

Excellence Nessuah Chief Economist Shlomo Maoz said that, nonetheless, the shekel was currently a better bet than the dollar.

February 8, 2006 07:31
2 minute read.
us currency 88

us currency 88. (photo credit: )


Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analysis from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief


The New Israeli Shekel traded at just over NIS 4.72 to the US dollar Tuesday as geopolitical concerns weighed on domestic markets and the dollar strengthened against the euro and yen, analysts said. Though it could rise a little more in the short term, "ultimately, the shekel will return to its strength," predicted Excellence Nessuah Chief Economist Shlomo Maoz. "It won't stay at these levels for long." Reflecting a loss of 2.6% of the shekel's value since the beginning of the year at a representative rate of NIS 4.719 per dollar for Tuesday, this was the lowest shekel value against the dollar since November 23. Maoz noted that some foreign investors appeared to be moving their money out of Israel as a result of uncertainty following Hamas's rise to power in the Palestinian Authority, citing drops in domestic stocks and bonds. "Some are realizing profits and leaving," he said. Maoz said Bank of Israel Governor Stanley Fischer's decisions to raise rates in recent months and his statements that further raises were likely had also contributed to the market's uncertainty. A currency analyst at GIFT Asset Management said the drops could also be a result of a report by US investment bank Morgan Stanley that recommended investors reduce their exposure to emerging markets, which the firm deemed overvalued at current levels. Israeli stocks have also been trading at very high values, he noted. Noting that industry figures are expecting the shekel to trade at up to NIS 4.75 per dollar in the current cycle of depreciation, as in November, the GIFT analyst said it was "impossible to tell" what will actually be in the short- term. If the geopolitical situation in the region worsens, the shekel will continue to lose strength against the dollar, but if calm reigns, the shekel would experience a "sharp correction" back to NIS 4.65 per dollar, the analyst said. "Right now [the shekel per dollar rate] seems to be going higher," he said. Excellence Nessuah's Maoz said that, nonetheless, the shekel was currently a better bet than the dollar. If the depreciation of the shekel lasts long enough to influence inflation, the Bank of Israel would be "forced" to raise the interest rate further above the current 4.75% level, to increase the difference between the dollar and shekel rates, the GIFT analyst said. The current proximity of the two interest rates is one of the factors making it easier for investors to exchange shekels for dollars, helping boost the dollar against the shekel, he added. Maoz, for his part, said the shekel's loss of value thus far has already affected inflation and would be reflected in the February consumer price index, to be released in a week.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection