Israel's currency is not expected to weaken “significantly further” amid support provided by the country’s central bank, analysts have said.
The shekel dropped to a near eight-year low against the US dollar on Monday morning after war broke out between Israel and Gaza. It was trading 0.15 per cent higher at 3.9764 against the greenback when markets closed on Friday.
“The Bank of Israel’s announcement this week that is ready to provide up to $30 billion of foreign exchange liquidity in the spot market and up to $15 billion in swaps, alongside the fact that the Israeli shekel was already undervalued prior to the conflict, signals to us that the currency is unlikely to weaken significantly further from current levels,” Ehsan Khoman, head of ESG, commodities and emerging markets research at MUFG told The National.
The Bank of Israel on Monday said it would carry out a sale of up to $30 billion in foreign exchange to support its currency.
The central bank “will operate in the market during the coming period in order to moderate volatility in the shekel exchange rate and to provide the necessary liquidity for the continued proper functioning of the markets”, the regulator said.
The move was expected to provide additional liquidity of up to $15 billion to the market.
The currency intervention came after war broke out between Israel and Hamas last on October 7.
Palestinian militant group Hamas launched an assault from Gaza, in which its gunmen killed at least 1,300 people in the worst attack on Israel yet.
Israel has since launched a bombing campaign against Hamas in the crowded enclave of Gaza before a possible ground invasion.
Hundreds of people from both sides have died due to the conflict. Israel ordered more than 1.1 million people in the north of Gaza to move south in 24 hours, as it prepared to launch a ground invasion of the territory.
The shekel has already been one of the worst performing currencies this year, down more than 12 per cent against the greenback as investors were concerned over the government’s move to overhaul the judiciary earlier this year.
“Intervention by the Bank of Israel may at best provide some short-term stability, however, this may not be sustainable,” said Krishnan Ramachandran, chief executive of Barjeel Geojit Financial Services.
“The US dollar-shekel is expected to hit 4.10 to 4.11 in the near term and can fall further if the conflict situation continues to escalate.”
Israel’s economy is also expected to be hit amid the continuing war with Hamas, analysts added.
“The biggest impact on the Israeli economy in the short term will be through consumer spending and tourism, with most international airlines suspending flights into the country,” said Scott Livermore, chief economist at Oxford Economics.
Emirates on Thursday cancelled all flights to Tel Aviv until October 20 amid the continuing war between Hamas and Israel. Other global airlines including British Airways and Virgin Atlantic also suspended flights to Israel’s capital.
“During the first year of the second intifada [from 2000 to the fourth quarter of 2001], the tourism sector was the most affected as employment dropped 7 per cent year-on-year due to inbound arrivals falling around 60 per cent year-on-year,” Mr Livermore said.
He added that, until the full response from Israel becomes clear, “the distribution of risks to the outlook remains wide.”
Israel's Tel Aviv share index, the TA-35, was down 0.73 per cent at the end of trading on Thursday.
“At face value, the conflict is predominantly a stagflationary shock, with supply-side disruptions due to higher fiscal expenditures while increasing reservists may weigh on labour market tightness,” Mr Khoman said.
“Israel’s fundamental balance of payments position is much healthier today than it has been during previous episodes of conflict, with the Bank of Israel accumulating a considerable quantum of reserves at around $200 billion.
Spare
Profile
Company name: Spare
Started: March 2018
Co-founders: Dalal Alrayes and Saurabh Shah
Based: UAE
Sector: FinTech
Investment: Own savings. Going for first round of fund-raising in March 2019
RESULT
Manchester United 2 Tottenham Hotspur 1
Man United: Sanchez (24' ), Herrera (62')
Spurs: Alli (11')
PULITZER PRIZE 2020 WINNERS
JOURNALISM
Public Service
Anchorage Daily News in collaboration with ProPublica
Breaking News Reporting
Staff of The Courier-Journal, Louisville, Ky.
Investigative Reporting
Brian M. Rosenthal of The New York Times
Explanatory Reporting
Staff of The Washington Post
Local Reporting
Staff of The Baltimore Sun
National Reporting
T. Christian Miller, Megan Rose and Robert Faturechi of ProPublica
and
Dominic Gates, Steve Miletich, Mike Baker and Lewis Kamb of The Seattle Times
International Reporting
Staff of The New York Times
Feature Writing
Ben Taub of The New Yorker
Commentary
Nikole Hannah-Jones of The New York Times
Criticism
Christopher Knight of the Los Angeles Times
Editorial Writing
Jeffery Gerritt of the Palestine (Tx.) Herald-Press
Editorial Cartooning
Barry Blitt, contributor, The New Yorker
Breaking News Photography
Photography Staff of Reuters
Feature Photography
Channi Anand, Mukhtar Khan and Dar Yasin of the Associated Press
Audio Reporting
Staff of This American Life with Molly O’Toole of the Los Angeles Times and Emily Green, freelancer, Vice News for “The Out Crowd”
LETTERS AND DRAMA
Fiction
"The Nickel Boys" by Colson Whitehead (Doubleday)
Drama
"A Strange Loop" by Michael R. Jackson
History
"Sweet Taste of Liberty: A True Story of Slavery and Restitution in America" by W. Caleb McDaniel (Oxford University Press)
Biography
"Sontag: Her Life and Work" by Benjamin Moser (Ecco/HarperCollins)
Poetry
"The Tradition" by Jericho Brown (Copper Canyon Press)
General Nonfiction
"The Undying: Pain, Vulnerability, Mortality, Medicine, Art, Time, Dreams, Data, Exhaustion, Cancer, and Care" by Anne Boyer (Farrar, Straus and Giroux)
and
"The End of the Myth: From the Frontier to the Border Wall in the Mind of America" by Greg Grandin (Metropolitan Books)
Music
"The Central Park Five" by Anthony Davis, premiered by Long Beach Opera on June 15, 2019
Special Citation
Ida B. Wells
MATCH INFO
Final: England v South Africa, Saturday, 1pm
MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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5
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Norway
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6.
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Canada
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7.
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Singapore
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Australia
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Saudi Arabia
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South Korea
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More from Rashmee Roshan Lall
Mohammed bin Zayed Majlis
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request