The dollar is as low as it has been in years – despite the accelerated purchase of dollars by the Bank of Israel in recent weeks, as the dollar continues to weaken – to the extent that Israel’s foreign currency reserves are now nearly a record $120 billion. In fact, over many decades, the Bank has been doing the same thing – and the purchases have had little impact on the dollar’s value versus the shekel, according to Prime Minister Binyamin Netanyahu. “For over fifty years, they have been trying to control the value of the currency. I don’t believe in it,” Netanyahu said at a high-tech forum.
Over just the past week, the Bank said, it had purchased $2 billion in order to prevent further slides in the value of the dollar. Exporters who sell their products abroad must price their goods and services in dollars, but when they bring those dollars home, they get fewer shekels for their dollars when the American currency is at a lower value – although their fixed expenses in shekels do not change.
The weakness of the shekel versus the dollar – in recent weeks it has been trading at well below NIS 3.50/dollar – was a hot topic at the forum, and Netanyahu said that he, too, was very concerned about the dollar as well. “I am prepared to hear ideas. You know my nature – it was not just by chance that I removed all limitations on the trading of foreign currency” when he was prime minister in 1997, a move that caused then-Finance Minister Dan Meridor to resign his post.
“I understand the problem, but I am not U.S. President Donald Trump and we are not China,” Netanyahu said. “We are a small country. You tell me how we can solve this. If you have solutions I would be happy to hear them.”