The exchange rate of the Israeli shekel decreased at the opening of today’s trading by 3.1% compared to the same day’s session last week, with the interaction of political and security factors that affected the performance of the Israeli currency.
According to Bank of Israel data, the shekel exchange rate fell today to 3.71 against the dollar, compared to 3.59 in the Monday session of last week, a decline of 3.1%.
The decline comes in conjunction with the escalation in the north with Lebanese Hezbollah, the referral of Israel to the International Court of Justice, and the reduction of interest rates on the shekel.
In an interview with the Globes website, which specializes in the Israeli economy, Ronen Menachem, chief economist at Mizrahi Tefahot Bank, points to a number of local factors that lead to the weakening of the shekel. He says, “The war in the Gaza Strip, the escalation in the north and the West Bank, Israel’s referral to the International Court of Justice, and the reduction of the Bank of… Israel interest rates at the beginning of the month, all of which led to a decline in the value of the shekel against the US dollar after a long period of strong performance that the shekel had maintained.”
Menachem believes that the recent decline in the value of the shekel will affect inflation first and foremost, as its weakness may mean an increase in the prices of imported products, explaining that if this happens it will become difficult for the Bank of Israel to make further cuts in interest rates.
According to an updated report by Yedioth Ahronoth, the cost of the Israeli war, after tabulating every aspect of the war so far, has reached about $60 billion.
The newspaper reported that each day costs the army about $272 million, with each reserve soldier receiving $82 per day, and the total of these payments alone amounted to $2.5 billion.
On the civil front, compensation amounts to tens of billions, but they are declining as the Israeli public gradually adapts to the “routine of war,” according to the newspaper.
Companies whose income decreased significantly will be compensated by $2.7 billion for the three months.
The newspaper estimates the damage to the communities that were subjected to the attacks at about $5.5 billion, and the same thing is now unfolding in the north with Hezbollah’s ongoing bombing campaign, with the financial loss amounting to about $1.6 billion, according to the newspaper.
Source : Israeli press + Anatolia Agency