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The Israeli shekel fell for an eighth consecutive session on Thursday, hitting its weakest level vs. the dollar since 2015, as the war with Hamas continued.
The shekel
USDILS,
lost another 0.1% to trade at 4.0312 per dollar, taking its losses against the U.S. currency to 14.3% to date in 2023.
Fears that Israel’s economy will be damaged by a drawn-out conflict caused Fitch Ratings on Tuesday to warn that it may have to downgrade the country’s debt, currently rated A+.
The cost of insuring against an Israel sovereign default with credit default swaps has more than doubled in the past three weeks, according to data from S&P Global Market Intelligence.
The Tel Aviv 125 equity index
XX:TA100
sits near a two-year low, having lost 9% in just the last month. U.S. investors can track the market via the iShares MSCI Israel ETF
EIS.
The Bank of Israel is due to make its next monetary-policy decision on Monday but has indicated it is reluctant to cut interest rates to support the economy lest it revive inflation.
Israel’s central bank has raised the main interest rate from 0.1% in April 2022 to the current 4.75%, having stood pat at the last two meetings, in July and September.
In the days after Hamas attacked Israel on Oct. 7, the central bank said it would sell up to $30 billion of foreign currency in the open market to support the shekel.
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