Stanley Fischer
Photo: Gil Yohanan
Bank of Israel buys declining dollar
Fischer purchases over half a billion dollars in bid to stop US currency from sliding further than NIS 3.6
The Bank of Israel stepped up its dollar purchase Thursday as the US currency slid to a surprising low, and was being traded at NIS 3.6.
Bank Governor Stanley Fischer would not disclose the sum purchased, but analysts say that so far over a half a billion dollars have been bought in efforts to raise the dollar's steadily declining worth.
Thus the dollar has decreased 2% since the president of the Bank of Israel raised interest rates at the end of September, completing a 7.5% drop since July.
Economists in Israel and the world are concerned about the shekel's growing worth, due to rising interest and growth rates. Many predict the dollar will continue to slide down to NIS 3.5 at least.
Finance Minister Yuval Steinitz has warned that the growing rift between the two currencies may eventually render exports unprofitable, and that another hike in interest rates may bring the dollar down to NIS 3.4.
On Wednesday the euro was seen to decline as well, down to NIS 4.978. But economists predict it will shoot past the NIS 5 mark soon.
Gideon Eshet and Gad Lior contributed to this report
