Shekel rallies after early September losses
The shekel is strengthening today against the dollar and against the euro. In afternoon inter-bank trading the shekel-dollar exchange rate is down 0.31% at NIS 3.4113/$ and down 0.44% against the euro at NIS 4.0525/€, Trend reports with reference to Globes.
Yesterday, the Bank of Israel set the shekel 0.378% down from Monday at NIS 3.422/$, and the representative shekel-euro rate was set 0.230% lower at NIS 4.071/€.
Having reached its strongest against the dollar since July 2008 at the end of August, when the representative rate was set at 3.353/$, the shekel then weakened every trading session for the first 11 days in September to NIS 3.438/$.
A correction combined with growing alarm in Israel at the rising number of new Covid-19 infections and the three-week lockdown being imposed for the upcoming Jewish holidays all took their toll on the Israeli currency. The tech share sell-off on world stock markets last week, which caused many investors to flee to the safe haven of the dollar, was a further factor in the shekel's depreciation.
But for the second straight day the shekel is fighting back. Global stock markets have been recovering, the peace agreement with UAE and Bahrain signed in Washington yesterday has boosted morale, and by imposing a 3-week lockdown the government is at least seeming to take firm action to halt the exponential rise in Covid-19.
The Bank of Israel reported that it had bought $2.5 billion in foreign currency last month in its failed attempts to weaken the shekel and keep the rate above NIS 3.40/$. It may not be long before it needs to resume its foreign currency purchases.