The shekel ends in July at the highest level since January

The shekel ended July at its strongest level against the dollar in more than six months. The Bank of Israel set the price of the shekel in the representative dollar today, down 0.339% at 3,233 shekels / dollar, the strongest since January 19, several days after the Central Bank announced that it will buy 30 billion dollars in foreign currency in 2021. The shekel is also trading on The strongest six-month levels against the euro and other major currencies. The Bank of Israel set the price of the shekel to the euro down 0.065% today at 3.849 shekels / euro. In afternoon futures trading, the shekel rose another 0.09% against the dollar to 3,230 shekels/dollar and 0.25% against the euro to 3.839 shekels/euro. The appreciation of the shekel against most of the world’s major currencies has once again raised concerns about Israeli exports, especially since the Bank of Israel may not continue to buy large amounts of foreign currency. The Bank of Israel bought $25 billion in foreign currency in the first half of 2021. While it has acknowledged that it is likely to exceed the planned $30 billion for the whole of 2021, foreign currency purchases in the second half of the year are expected to be significant. reduced. The shekel was rising with the increased inflow of foreign currency into the Israeli economy from abroad, which caused a sharp rise in the Israeli currency. Israel’s current account surplus grew, direct investments in Israel rose, Israeli investment institutions sold large amounts of foreign currency due to the profitability of their investments in capital markets abroad, and foreign investors bought Israeli government bonds. Despite the growth of Israeli exports despite the rise in the value of the shekel, since the beginning of January, during the third closure, the Monetary Committee of the Bank of Israel expressed its concerns that exports would be damaged at a certain stage. Monetary committee members feel that export firms will be forced to close, including small businesses. However, Modi Shafrier, chief strategist at Bank of Mizrahi-Tefahot, said, “The Bank of Israel has to adjust its purchases because on the other side of the currency there are those affected by the Bank of Israel’s decision to stop revaluation of the shekel in 2021. If for example the shekel is 3.15 shekels. / dollars – as if there had been no major intervention over the past year – there would have been less pressure on prices in terms of imports or foreign freight rates, which jumped. The Bank of Israel launched the program to help exporters but conditions in the economy seem to have changed since then.” He added: “The Bank of Israel hinted last week that the foreign exchange purchase program will end and will operate from time to time in the foreign exchange market. The Bank of Israel program was a special program for a special status. The purchase program stopped revaluation in 2021. Since the situation has improved, the Bank of Israel appears to be He will end his program at the end of 2021, and next year he will buy foreign currency according to the situation in the economy, as happened previously. The Bank of Israel will buy foreign currency in 2022 but the purchases will remain moderate because the situation does not justify this. ” Schafferer explained, “What led to the renewed strengthening of the NIS was the rally in stock markets around the world, which led to the most foreign exchange sales by institutional investors, along with fundamental forces that supported the NIS such as a large current account surplus and a sharp rise in the volume of investments. Foreigners in Israel.The strong shekel is beneficial to consumers in Israel as it lowers the cost of living and lowers the prices of goods and freight.Importers absorb some of the price hikes while on the other hand, high-tech exporters don’t have to worry, and low-tech exports (which were hit by the strong shekel) also rose. Recently “. Published by Globes, Israel business news – en.globes.co.il – on July 30, 2021 © Copyright Globes Publisher Itonut (1983) Ltd. 2021