Bank of Israel steps up intervention to curb shekel appreciation
Source: FxWire Pro - Commentary / 06 May 2016 10:32:48 Eastern Standard Time
The US dollar was up against the shekel yesterday, against global trends. The rise probably stemmed from the intervention of the Bank of Israel which is trying to halt the sharp appreciation of the shekel in recent weeks and the risk posed to Israeli exporters.
The appreciation pressure on the currency is quite strong. USD-ILS had declined all the way to 3.73 in late April, while the EUR-ILS has been more stable this year. The fall in USD-ILS comes despite the central bank intervening by $1.2bn during the month.
"In our view, BoI's FX interventions will only create near-term reversals and not make a dent into the primary trend. In order to stem appreciation pressure over the medium-term, BoI would have to drop interest rates to negative, which the CB resists. We see USD-ILS at 3.70 by year-end." said Commerzbank in a report.© FxWire Pro 2018. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.