The dollar exchange rate reached a 25-year low yesterday (Tuesday) when it fell below NIS 3.1.
The euro has fallen sharply in recent days against the shekel and traded yesterday at a price of NIS 3,511 per euro.
Despite this, the Bank of Israel has refrained from interfering in the market, and the Governor of the Bank of Israel, Prof. Amir Yaron, continues to be ambiguous regarding the Bank's intervention in trade.
Yesterday it was revealed in "Israel Today" that the Minister of Finance will publish in the coming days a package of measures to encourage exporters, in order to compensate exporters a little for the strengthening of the shekel.
Governor Amir Yaron, Photo: Yehoshua Yosef
In the past year, the shekel has strengthened more than 10% against the dollar.
The package of measures is essential, because the Bank of Israel prefers to allow the shekel to become stronger than it has been in the past year.
According to Prof. Amir Yaron, "the market picture is completely different now, and the strengthening shekel may slightly curb world inflation."
Close to the top range
The Bank of Israel prefers to see rising inflation in the world, and also in Israel, as a temporary situation, so they do not react to it in the way we have known in the past.
Inflation in the US has reached 6.2% and in Israel, as published yesterday, it now stands at 2.6% - close to the top target range of 3%. The market is now operating, without the intervention of the Bank of Israel, may continue to strengthen against the dollar and euro. It is said that foreign companies "dictate high demand for the shekel, and on the other hand, the level of demand for dollars and euros on the part of Israelis has fallen."
Currency balances - anomalies
More than a month ago, the Bank of Israel completed its $ 30 billion foreign exchange purchase program, accumulating foreign exchange reserves in excess of $ 210 billion.
These are exceptional balances compared to what is customary in the developed countries of the world, amounting to 40% of GDP.
The market is now waiting anxiously for today's trading, during which it will become clear how much the bank is willing to stay out of the foreign exchange field as it continues to lose ground against the shekel.
