The dollar continues to weaken against the shekel: NIS 3.24 - Non-intervention of the Bank of Israel surprises

The dollar continues to weaken against the shekel - and the Bank of Israel does not interfere in trading. The representative exchange rate of the dollar was set on Monday at NIS 3.24, a decrease of 0.46% compared to Friday. As a result, the dollar has fallen to a new low in nine weeks. The shekel strengthened against all foreign currencies, except for the Australian dollar. The representative euro exchange rate was set at NIS 3.915, a decrease of 0.22%.
The non-intervention of the Bank of Israel surprises market traders a little. The Bank of Israel promised to protect the exchange rates in favor of exporters and manufacturers, but the weakening from NIS 3.34 to NIS 3.24, about 3% in recent days, without any response, was not expected.
When the dollar fell to NIS 3.11 in January, the Bank of Israel clarified that it would work to strengthen the dollar against the shekel.
There was no doubt that this was a significant strengthening of the shekel, since otherwise the Governor of the Bank of Israel, Prof. Amir Yaron, would not have dramatically stated in advance the intention to purchase an amount of at least $ 30 billion in 2021.
The fall in the dollar rate is due, among other things, to President Joe Biden's intention to double the tax rate levied on the stock market's earnings per year by more than $ 1 million.
In addition, the weakening of the dollar is also due to the continued surplus of dollars in the Israeli market, due to the entry of dollars from gas production. Another, albeit more marginal, reason is the renewed weakening in foreign currency purchases by Israelis now hesitant to go abroad. This is due to warnings from the Ministry of Health and the spread of the corona virus in many countries and even a new closure.
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