Shekel weakens sharply amid BoI protests

The shekel was weakening sharply today against the dollar and against the euro. In inter-bank transactions in the afternoon, the shekel exchange rate against the dollar increased by 1.11%, at 3.678 shekels / dollar, and the shekel price against the euro increased by 1.17%, at 4.028 shekels / euro.

Yesterday, the Bank of Israel set the representative rate of the shekel against the dollar at 0.359% higher than Monday, at 3.638 shekels / dollar, and the representative rate of the shekel against the euro was set at 0.734%, at 3.982 shekels / euro.

The shekel began to decline yesterday after Bank of Israel Governor Prof. Amir Yaron sent a strongly worded letter to Prime Minister Benjamin Netanyahu expressing his strong opposition to proposed legislation that would require banks to pay interest on consumers’ checking accounts. The bill, approved by the Ministerial Committee for Legislation last week, would have required banks to pay interest at a minimum rate set by the Governor of the Bank of Israel and approved by the Finance Minister. Yaron made it clear that such a law would be a blow to the independence of the Bank of Israel.

The bill was due to receive a preliminary reading in the Knesset this morning but was removed from the agenda at the last minute

However, investors remain concerned about the Israeli currency as the bill has been put on hold rather than being delayed. At the same time, the government reiterated its intention to press ahead with its plans to reform the judiciary.

Published by Globes, Israel business news – en.globes.co.il – on June 28, 2023.

© Copyright Globes Publisher Itonut (1983) Ltd., 2023.