Israel Shekel World’s Worst Currency After Central Bank Buys – Bloomberg Business
The shekel depreciated the most among a basket of global peers, after the Bank of Israel intervened to beat back the currency’s best three-day rally since March.
Israel’s currency weakened 0.8 percent, more than 30 other major currencies tracked by Bloomberg, to 3.7754 per dollar at 5:30 p.m. in Tel Aviv. The Bank of Israel bought about $200 million after the shekel appreciated 2.1 percent in the three days through Wednesday.“It’s the Bank of Israel against the market,” Yariv Shalev, a currency dealer at Mercantile Discount Bank in Tel Aviv, said by phone. “The central bank will continue to buy but we don’t see the dollar/shekel coming back to levels we’ve seen in the last week. The market does not believe in the interventions, and it knows the Bank of Israel is very limited.”The central bank will have to rely on foreign-exchange purchases to tame shekel strength after governor Karnit Flug said on Monday that the likelihood the regulator would turn to unconventional policy tools had decreased. She also expressed concern over a lack of export growth, which a stronger currency would not help.