The Israeli shekel has become stronger this year and is still reportedly gaining more. This development comes as the country’s central bank, the Bank of Israel, completed its acquisition of billions-worth of foreign currency lately.
We find this foreign exchange-related news important to share with our readers. We believe those who would be trading their Israeli shekel units with the US dollar or other foreign currencies will then have an idea of their foreign exchange transaction’s outcome.
According to the news posted online by Israeli newspaper Globes, the Israeli shekel’s value has appreciated by 6 percent against the basket of currencies of Israel’s major trading partners. This surge is reportedly a record strength, and the official currency of the Middle Eastern country carries on gaining.
The Israeli shekel’s gains come as the Bank of Israel bought almost US$30 billion in foreign currency this year. The central bank performed this measure to moderate the country’s national currency’s strengthening.
Additionally, the Bank of Israel purchased such an amount in foreign currency to help exporters. The central bank of Israel set the representative Israeli shekel-US dollar rate on the foreign exchange market, down 0.22 percent last Friday, November 5 at Israeli new shekel or NIS 3.118 per US dollar.
It also set the representative Israeli shekel-euro rate 0.20 percent lower at NIS 3.603 per euro. Meanwhile, the Israeli shekel-US dollar rate is further down 0.26 percent at 3.1098 per US dollar in futures trading.
The euro is down 0.15 percent at Israeli shekel 3.5971 per euro. Alex Zabezhinsky wrote in his weekly survey that the expectations for a rise in the interest rate in Israel had been the primary reason for the Israeli shekel’s swift appreciation.
The Meitav DS chief economist pointed out that the interest rate inherent in Israel in another three to five years had moved higher than the interest rate in the United States, based on the Interest Rate Swap or IRS. Zabezhinsky said that his group estimates that the Bank of Israel would carry on intervening in the foreign currency trading market, despite itself reaching the threshold for its purchases.
He cited that the Israeli central bank would carry on with its foreign currency purchases. We believe many factors are causing the Israeli shekel’s value to ascend in a seemingly relentless manner.
Among them is the anticipation for an interest rate hike in the country. We believe that the Israeli shekel’s appreciation is not permanent.
If people have Israeli shekel units, we recommend exchanging their money in any currency they desire. But they should see if the situation is in their favor first to get more value for their Israeli shekels.