The Israeli currency drastically fell and Tel Aviv Stock Exchange declines 5.7%
The Tel Aviv Stock Exchange fell by 5.7% in the first hour of opening trading, Sunday, one day after Hamas launched operation al Aqsa Flood against Israel.
According to the stock exchange website, the main index fell by 5.7%, or 124 points, to 2,040 points, amid widespread selling.
On Monday, investors in Israel witnessed a decline of currency exchange rates, as the Israeli shekel fell, as the decline will add more weakness to the Israeli currency.
Investors in the Tel Aviv Stock Exchange suffered this year from weak trading due to the judicial reform plan and the stages that preceded its approval by the Knesset, so the current developments come to add more pressure on the market.
The Israeli shekel fell to its lowest levels since 2016 against the dollar, affected by the Hamas surprise attack, on Saturday morning.
Meanwhile the Israeli shekel exchange rate, reached 3.93 shekels per one US dollar.
Thus, the shekel faces an additional blow this year, after it was previously subjected to a wave of decline caused by the judiciary reform plan and its approval by the Knesset.
A previous report issued last June by the American investment bank Goldman Sachs said that the fair value of the dollar’s exchange rate was 3.3 shekels, while its actual value at that time was 3.78 shekels.
On Sunday, the Globes website, which specializes in Israeli economics, said, “The sudden attack launched by Hamas, coupled with the social and political dispute in Israel on the judiciary reform plan, will lead to a further decline in the value of the shekel”.
In addition to the high cost of the war, the Ministry of Finance and the Bank of Israel will be facing the weakness of the shekel, and trying to maintain a reasonable rate within the range of 3.8 shekels/dollar.
