Sunday, June 16, 2024

Israeli shekel bounces back to record high against USD amid war

The Israeli shekel has bounced back to its highest value against the US dollar (USD) since the raging war with the Hamas erupted on October 7.

According to official rates issued by the country’s central bank, the ongoing appreciation of the Israeli currency against the green back stood at 3.728 shekels per USD on Friday, reports Xinhua news agency.

The shekel had been on a downward path since Hamas launched its unprecedented attack on Israel on October 7, when the rate was about 3.863 shekels per dollar, declining to 4.079 on October 26, an 11-year low.

Since then, however, the trend reversed.

Yossi Frank, CEO of Energy Finance, a leading Israeli financial risk management company, told Xinhua that the market became convinced that the fighting would not spread to other fronts except Gaza after the high concerns in the first weeks of the conflict.

He added that the recent surge in the US stock markets, due to the new encouraging inflation data, led the institutional entities in Israel to sell dollars and thus strengthened the shekel.

“At the same time, October’s high inflation rate in Israel reduced the chance for the central bank to raise the basic interest rate, which also contributed to the shekel’s strength,” he noted.

“All in all, most of the factors that played a role in the shekel’s depreciation this year no longer exist,” Frank said.

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