The Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.503/$, down 0.40% on Friday's rate, and the shekel-euro representative exchange rate at NIS 4.806/€, up 0.06%. The shekel-dollar exchange rate has fallen to its lowest level in 28 months - since August 2011. In inter-bank trading today, the shekel-dollar exchange rate fell below NIS 3.50/$, before recovering slightly. Market sources are waiting for the Bank of Israel to intevene as manufacturers fear the effect of the strong shekel on exports.
The shekel was buoyed by the Ministry of Finance's report today that the budget deficit for 2013 will be less than the 4.65% target. The deficit narrowed to NIS 18.9 billion in January-November from NIS 26.2 billion in the corresponding period of 2012, and the 12-month deficit through November was NIS 31.7 billion, or 3% of GDP.
Atrade said this morning, "The dollar was in defensive mode at today's market opening. The shekel-dollar exchange rate, which closed near NIS 3.50/$, will likely fall through this support level and drop toward NIS 3.45/$. Intervention by Bank of Israel is not expected to be able to stem the appreciation of the shekel, unless there is an unconventional intervention that will send speculators fleeing."
Published by Globes [online], Israel business news - www.globes-online.com - on December 9, 2013
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