Jerusalem, 16 November, 2021 (TPS) — The US Dollar hit a 25 year low against the Shekel on Tuesday. It officially dropped below the benchmark 3.10 to 1 New Israeli Shekel rate, a threshold that the Bank of Israel has been hoping to avoid crossing.
At the end of official trading, the Bank of Israel set the Dollar to NIS exchange rate at $1 to 3.09 NIS. The dollar lost -0.387% of its value in total against the Shekel on Tuesday.
To put this into perspective, the last time that the Dollar was this low Benjamin Netanyahu was still serving his first term as Israel’s prime minister, AOL was one of the world’s biggest companies and the World Wide Web was still in its infancy.
A strong Shekel is good for Israeli consumers and tourists. It makes it cheaper to travel abroad as the Shekel gets more in local currencies. And since airfares and hotel rates are set in either Dollars or Euros, for the most part, when the Shekel rises it costs an Israeli fewer Shekels to buy the same item. This also makes foreign imports less expensive for the Israeli consumer.
But there is a downside that is harmful to Israel’s economy. The strong Shekel means foreign investors in Israeli startups get less for their money. Still hurts local growth. It also means less spending by foreign tourists since their Dollars and Euros do not go as far. And it also makes Israeli exports more expensive to foreign buyers.
This is not just a problem of a weak Dollar resulting from America’s fiscal and financial policies vis-à-vis debt and government spending as a percentage of GDP. All of the world’s major convertible currencies were down against the Shekel.
The Euro dropped -1.092% against the Shekel and ended the day at a rate of 3.5136 to the Shekel.
The British Pound fell -0.247% and finished trading at a rate of 4.1564 to the Shekel.
