For the first time since August 2014, the shekel-dollar exchange rate has fallen to below NIS 3.5/$, while the Bank of Israel refrains from buying foreign currency to tamp down the shekel’s value.
The exchange rate had slipped to NIS 3.4832/$ as of Thursday afternoon in Israel.
That marks a loss of 9 percent of the dollar’s value against the shekel since the beginning of 2017.
The dollar is under pressure worldwide and has hit a new ten month low against the euro after President Donald Trump’s healthcare bill was delayed by Congress while Eurozone markets are performing well. The euro rose above NIS 4/€ yesterday but has slipped back below that rate today.
The clamor for the Bank of Israel to intervene, most forcefully from exporters, grows as the exchange rate slides downward.
In April and May, the BoI bought over $2 billion in foreign currency, propping up the dollar with several purchaces during that period.
But for the past month now, as the policy has proven ineffective and it has come under criticism for an unprecedentedly massive foreign currency reserve buildup, it has decided not to intervene.