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Israeli shekel slips against dollar to 2.5-year low

Xinhua, March 10, 2015 Adjust font size:

The Israeli shekel weakened against the U.S. dollar Monday, hitting a 2.5-year record low, Israel's central bank said on its website.

The dollar rose 0.82 against the shekel, closing at 4.01 shekels per dollar, a rate last seen in September 2012.

The appreciation of the dollar against the shekel occurred as the dollar gained momentum in major international markets, after the U.S. Bureau of Labor Statistics released upgraded employment figures Friday.

Israel's central bank reported Friday that it bought one billion dollars last month, as part of its efforts to curb the bolstered shekel and boost exports.

The buying spree the past years left the central bank with a huge amount of foreign currency. The recent purchase has increased Israel's currency reserves to 85.3 billion dollars.

"Following several days of fluctuation, the shekel-dollar rate broke through the 4 shekels per dollar barrier very strongly, FXCM-Israel, an online foreign exchange trading firm, said in a market review.

"The next target for the shekel-dollar pair will be at the 4.07 shekel per dollar level," FXCM said. "Undoubtedly current conditions favor the dollar, given the growth gap between Israel and the US, and interest rate expectations assumed from it," FXCM added.

According to analysts, the shekel-dollar rate could rise up to 4.1-4.2, and further depreciation of the shekel beyond that rate would be detrimental for the Israeli economy. Endit