Israeli Shekel Weakens Sharply Against Dollar Amid Political Uncertainty
The Israeli shekel has weakened by 4.4% against the dollar since the elections due to political uncertainty, with the dollar reaching 3.16 shekels. This currency depreciation is expected to increase import costs and accelerate inflation, with forecasts for the October index at 0.5%. The Tel Aviv Stock Exchange also saw declines, with major indices falling.
הידיעה ב-5 שורות · תקציר של baba
- The Israeli shekel has weakened by 4.4% against the dollar since the elections.
- Political uncertainty is cited as the primary reason for the shekel's sharp decline.
- The dollar is trading around 3.16 shekels, up from 3.02 shekels on election day.
- The rising dollar and euro may accelerate inflation in Israel.
- The Tel Aviv Stock Exchange experienced declines following the currency drop.
The Israeli shekel has weakened by approximately 4.4% against the US dollar since the recent elections, marking the sharpest decline in months. This depreciation is attributed to concerns over political instability and the economic impact of the delay in forming a new government. The dollar was trading around 3.16 shekels in continuous trading on Tuesday afternoon, compared to its representative rate of 3.02 shekels on election day, a rise of about 4.5% in just one week. The euro has also seen a significant increase, trading at 3.54 shekels compared to its previous representative rate of 3.5168 shekels. Demand for foreign currency is reportedly coming from institutional bodies, investors converting shekels, and households. The rising dollar and euro exchange rates are expected to increase the cost of imported raw materials and products, potentially accelerating inflation. Forecasts for the October inflation index are already at 0.5%, and the November index, which was previously expected to be lower, may also rise due to the shekel's weakening. Meanwhile, the Tel Aviv Stock Exchange is experiencing declines, with the TA-90 index down 1% and the TA-125 index down 0.6%.
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