The Israeli shekel hit its lowest point in 11 years compared to the US dollar on Thursday, following a “targeted raid” in Gaza conducted by IDF tanks and infantry the previous night.
As of late morning, the shekel had fallen 0.29% against the dollar, marking a decline of over 5% since the onset of attacks by Hamas earlier in the month. The current exchange rate is the weakest the shekel has been since July 2012.
This decline in value occurred subsequent to the Israel Defence Forces (IDF) announcing their “targeted raid using tanks in the northern Gaza Strip,” describing it as a part of preparations for upcoming combat phases.
On the previous day, Israel’s Prime Minister Benjamin Netanyahu stated that Israel was getting ready for a ground offensive. This comes in the wake of a major bombing campaign targeting Hamas-controlled regions in Gaza.
The situation is heightening concerns about the potential negative impacts on the region, particularly in terms of economic stability. Earlier in the week, Israel’s central bank reduced its economic growth forecasts amidst fears that the ongoing conflict with Hamas could hinder economic progress.
The latest data from the research department at the Bank of Israel predicts a GDP growth of 2.3% for the current year and 2.8% for 2024. These figures are a decrease from the previously estimated 3% growth for both years.
Despite these changes, the bank’s monetary committee decided to maintain the interest rates at 4.75%.
