Lapid Pledges to Weaken Shekel

YERUSHALAYIM -
Israel’s Minister of Finance Yair Lapid. (Flash 90)
Israel’s Minister of Finance Yair Lapid. (Flash 90)

“We are going to do everything in our power to make sure we are weakening the shekel. It is too strong,” Minister of Finance Yair Lapid told Bloomberg on Thursday.

Lapid did not elaborate on how he plans to keep the shekel down, nor did he say what the exchange rate should be. The shekel has surged despite a series of Bank of Israel dollar-buying interventions during the year.

“I am not going to say what we are going to do,” he said, except for a promise to work with the new BOI governor, Dr. Karnit Flug, whose appointment is slated for final approval by the Cabinet next Sunday.

Lapid and Flug will have their work cut out for them.

FXCM Israel said on Wednesday, “Under the current global and local conditions, it seems to be just a matter of time before we see another collapse of the dollar.

“The dollar is very vulnerable; the U.S. economy is declining, the political system is paralyzed, and the market believes that the Fed will not begin tapering the quantitative easing before March 2014 at the earliest. Domestic factors in Israel, such as profits from gas, are weighing on the exchange rate.”

The shekel-dollar exchange rate was NIS 3.52/$ on Thursday.

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