Posted 12/24/2023, 8:13:48 AM
Shekel Rallies to Six-Month High Against Dollar on Budget Deficit Concerns
- The shekel-dollar exchange rate fell to its lowest level since July, with the shekel strengthening against major currencies like the dollar and euro
- According to economist Ronen Menachem, the shekel has strengthened due to doubts about Israel's budget deficit and ability of the central bank to cut interest rates
- The conflict with Hamas and Houthi threats initially weakened the shekel, but it has rebounded as markets are more concerned about judicial reform
- The Bank of Israel may continue intervening in currency markets by selling foreign currency if needed to stabilize the shekel
- Analyst Alim Remtulla sees potential for further shekel appreciation in 2023, which could attract foreign investors back to the Tel Aviv Stock Exchange