Smotrich's comments on the cuts to youth movements/Knesset channel
The shekel weakened against the dollar this morning, after Moody's announced at the end of the week that Israel's credit rating had been downgraded to A2, with a negative outlook.
Many analysts predicted that the shekel could suffer a decline in the coming days due to the decision.
However, as of today, the shekel is trading at the same level as it was traded in the morning, at 3.67 shekels to the dollar.
The shekel started the day with a decrease against the dollar and the euro, but throughout the day it strengthened and at this time the dollar rate is the same as its rate this morning, and the euro rate even decreased slightly, from NIS 3.96 this morning, to NIS 3.94 now.
It is not impossible that this is due to the intervention of the Bank of Israel and the sale of foreign currency, as it did at the beginning of the war in order to stabilize the shekel. A day after the outbreak of the war, Bank of Israel Governor Prof. Amir Yaron announced an emergency plan to sell up to 30 billion dollars in order to stabilize the shekel. In the end of which the bank sold $8.209 billion last October. The Bank of Israel reports once a month on its activities in this area, so it is not possible to know if it intervened in the trade.
The shekel against the dollar.
It is not possible to know at this stage if the Bank of Israel intervened in the trade/Reuven Castro
The macroeconomics department of Discount Bank estimates that "no extreme reaction is expected in the markets, since they have already embodied a high level of risk for a downgrade/horizon of the rating, although, not a combined reduction of them. Moody's negative surprise is expected to lead to volatility in the exchange rate in the coming week , however, we do not estimate that a sharp devaluation is expected.
"In January, similar to December 2023, the Bank of Israel did not sell dollars, in light of the appreciation of the shekel, which obviates the need to intervene in the foreign exchange market. As a result, the outbreak of the war, the Bank of Israel sold only 8.5 billion dollars, Out of a plan to sell up to 30 billion dollars, and the foreign exchange reserves of the Bank of Israel stood at 206 billion dollars at the end of January, 39.8% of GDP.
Higher than their pre-war level."
Another indication of investors' confidence in the economy was the issuance of state bonds to the extent of NIS 4.1 billion, with demand that was 6 times higher than the supply, this compared to demand at a rate of approximately 4 times in previous issuances.
Finance Minister Bezalel Smotrich tweeted that this is the highest demand ever recorded for a state bond issue. "Today we completed an issue of 4.1 billion in bonds and the demand was 25 billion times 6.2! This is the highest demand ever for an issue by the State of Israel."
More on the same topic:
Moody's
dollar rate
euro exchange rate
Bezalel Smotrich
Credit Rating
War of Iron Swords
Gaza war
Bank of Israel
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