Israeli New Sheqel Hits Near 33-year High

The Israeli New Sheqel touched 2.80 against the USD, the highest since July 1993. Over the past 4 weeks, US Dollar Israeli New Sheqel lost 5.36%, and in the last 12 months, it decreased 20.48%.

The Israeli New Sheqel touched 2.85 against the USD, the highest since October 1993. Over the past 4 weeks, US Dollar Israeli New Sheqel lost 4.47%, and in the last 12 months, it decreased 19.57%.

The Israeli shekel strengthened to around $2.88, its strongest level since 1993, after a massive 20% appreciation over the past year. In May, the Bank of Israel cut its benchmark interest rate by 25 bps to 3.75%, in line with expectations, citing stabilising inflation, a stronger shekel and signs that Washington and Tehran are moving closer to extending their ceasefire and reopening the Strait of Hormuz. Further supporting the rate cut was a narrowing 12-month rolling fiscal deficit, which contracted to 3.8% of gross domestic product in April. According to a Bank of Israel survey published on May 19, average inflation expectations for the next 12 months fell to 1.8% from 2.3%, safely hitting the midpoint of the government's 1% to 3% target range. Policymakers are now expected to deliver one or two more rate cuts before year end as the economy continues to recover slowly from the conflict with Iran.