The Israeli shekel experienced a dramatic rollercoaster ride on Monday, as investors grappled with the potential long-term impact of rising political tension in the country. The shekel weakened for a third consecutive day, dropping 0.7% against the dollar, after initially surging more than 1%, only to plummet by as much as 1.5%.
The cause of this wild fluctuation lies in the political storm surrounding the approval of a contentious judicial overhaul bill by Israel’s parliament. The bill, which curtails the power of judges to overrule government decisions, has ignited massive demonstrations and drawn criticism from opposition parties. Despite the protests, the parliament ratified the bill, leading to significant market repercussions.
Financial markets in Israel took a hit in response to the bill’s passage. The Tel Aviv share indices slid, with the benchmark TA-125 index dropping 2.3% and the blue-chip TA-35 index falling 2.2%. The shekel also weakened, hitting a two-week low against the dollar at 3.68, its weakest level since July 12. Furthermore, government bond prices experienced a decline of up to 1.8%.
The controversy over the judicial overhaul has not been limited to financial markets. In response to the vote, some 150 of Israel’s largest companies participated in a strike, and major malls closed their doors in protest. The high-tech sector, which has been at the forefront of opposing the bill, also took part in the strike. Companies fear that the changes may undermine democracy, lead to reduced foreign investments, and trigger an outflow of funds from the country.
The impact of the situation on Israel’s credit rating is also a concern. International credit rating agencies, including Standard & Poor’s and Moody’s Investors Service, have been warning about a potential deterioration in Israel’s governance and institutional strength amid the political tensions. This has raised concerns about possible credit rating downgrades in the future.
As the situation continues to unfold, investors and businesses are keeping a close eye on developments, hoping for a resolution that can stabilize the shekel and restore investor confidence. However, with the uncertainty surrounding the political landscape, the future remains uncertain for Israel’s currency and financial markets.
By: Montel Kamau Serrari Financial Analyst 25th July, 2023
photo source :Google
Article and News Disclaimer
The information provided on www.serrarigroup.com is for general informational purposes only. While we strive to keep the information up to date and accurate, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
www.serrarigroup.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information on the website is provided on an "as-is" basis, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
In no event will www.serrarigroup.com be liable to you or anyone else for any decision made or action taken in reliance on the information provided on the website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.
The articles, news, and information presented on www.serrarigroup.com reflect the opinions of the respective authors and contributors and do not necessarily represent the views of the website or its management. Any views or opinions expressed are solely those of the individual authors and do not represent the website's views or opinions as a whole.
The content on www.serrarigroup.com may include links to external websites, which are provided for convenience and informational purposes only. We have no control over the nature, content, and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, www.serrarigroup.com takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
Please note that laws, regulations, and information can change rapidly, and we advise you to conduct further research and seek professional advice when necessary.
By using www.serrarigroup.com, you agree to this disclaimer and its terms. If you do not agree with this disclaimer, please do not use the website.
www.serrarigroup.com, reserves the right to update, modify, or remove any part of this disclaimer without prior notice. It is your responsibility to review this disclaimer periodically for changes.
Serrari Group 2023
