Amid Rosy Statistics, Dollar Loses 9 Percent Against Shekel in 2017

With nearly full employment and low inflation, 2017 will go down in the record books as one of the most successful in Israel’s economic history, economists reviewing the past year’s activity told Maariv. But in one area, despite its best efforts, the government has failed — and that is the ever-sliding value of the dollar versus the shekel.

The greenback lost 9 percent against the shekel in 2017, and it closed the year at NIS 3.467/dollar. The shekel also strengthened in relation to other foreign currencies. The dollar’s slide continued despite purchases of excess dollars by the Bank of Israel, in an attempt to sop up excess dollars that are pulling down that currency’s value against the shekel. Israel’s foreign currency reserves at the end of 2017 stood at $122 billion.

Interest rates remained very low, but inflation was low as well. Although numbers for December were not in yet, it is expected that inflation for the year will have been a mere half of one percent. At that level, this will be the fourth year in a row that the inflation rate was below the desired 1-percent to 2-percent inflation band that the Bank of Israel has set as an inflation goal. With that, prices for real estate — which are computed separately from the consumer price index inflation rate — rose as much as 3.5 percent on average in 2017.

Last year was also a good one for investors in the Tel Aviv Stock Exchange, with the majority of stocks and indices rising in value. This, despite the fall in two major stocks — Teva, whose stock has tumbled in light of the company’s ongoing financial troubles, and Bezeq, which has faced investor pressure due to ongoing investigations by government officials against top staff.