Bank of Israel Research Finds Intervention Affected Shekel-dollar Exchange Rate

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Together forms medical-marijuana JV with European partner ■ Delek abandons plan to sell insurer Phoenix as deadline passes ■ Plus500 sees better business in 2018 thanks to Trump Bank of Israel research finds intervention affected shekel-dollar exchange rate A little behind the eight ball, the Bank of Israel released research on Monday which shows that its controversial policy of intervening in the forex market has, in fact, weakened the shekel, not only in the short term but over a period of 40-60 trading days. Researchers Itamar Caspi and Sigal Ribon found that intervention caused the shekel to lose value immediately 90% of the time the central bank intervened in 2009-11 and 2013-17, by as much as 6% during periods of intense intervention. The research only covered surprise interventions, not the routine forex buying the bank does to offset the impact of natural gas production on reducing Israel’s import bill. However, the bank is not known to have intervened in the market since one big action last January. Since mid-March, the dollar has strengthened 6.7% against the shekel. Bank of Israel Research Finds Intervention Affected Shekel-dollar Exchange Rate

thumbnail courtesy of haaretz.com

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