Shekel Hits Yet Another 25-Year High Against the Dollar
The shekel-to-dollar exchange rate hit a new 25-year-high on Monday, November 8, with $1 briefly fetching just NIS 3.08 before closing for the day around NIS 3.11.
The shekel has been gaining in strength against major currencies like the dollar and euro, thanks in large part to high levels of foreign direct investment and the strength of the tech sector.
While a stronger currency allows for cheaper imports, it can also hurt exporters by making their goods more expensive for foreign customers.
The new record high came just days after the previous record high was briefly reached, before receding.
The Globes business daily reported that the Bank of Israel intervened on Tuesday with a purchase of foreign currency to slow the shekel’s rise. The bank declined to comment.
The currency’s strength is due to factors including Israel’s strong economy, foreign investments in Israeli companies moving capital into the country, Bank of Israel monetary policies, and strong global equities markets, which can cause Israeli financial institutions to sell foreign currency as their exposure rises. The shekel traded at around 3.6 to the dollar for several years, but more recently was in the 3.2 – 3.3 range. (TOI / VFI News)
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