Shekel drops more than 2%, government bonds and shares down after Knesset vote


The shekel drops more than 2% and government bonds and shares slide in Tel Aviv after the Knesset passed the first reading of a bill to make contested changes to the judiciary.

The local currency fall more than 2%, trading at 3.64 against the US dollar in afternoon trading in Tel Aviv and headed for the lowest level since April 2020.

Since the beginning of the month the shekel is down more than 5% against the greenback.

The Tel Aviv Stock Exchange’s benchmark TA-125 index declines 1.8%, while the TA-35 index of blue-chip companies slips about 1.5%, and longer-term government bond prices plunge between 1% and 2%. That’s after shares on Wall Street on Monday closed 1% lower.

Local and foreign institutional investors, as well as banking heads and prominent economists, have issued numerous warnings about the potential economic and financial fallout from the judicial shakeup.

“If until now, the market was pricing in the possibility for a compromise or dialogue on the judicial changes, with the Knesset vote we are further away from that,” IBI Investment House Ltd. chief economist Rafi Gozlan tells The Times of Israel. “Should the proposed judicial changes be fully passed this is very worrying as Israel is going to have a very different economy from where we are now with a strong government and no separation of institutional power.”

“The market is now repricing the risk premium on domestic assets and we are seeing strong demand for foreign exchange and a sale of local government bonds which is putting pressure on the government,” Gozlan adds.

You’re a dedicated reader

That’s why we started the Times of Israel ten years ago – to provide discerning readers like you with must-read coverage of Israel and the Jewish world.

So now we have a request. Unlike other news outlets, we haven’t put up a paywall. But as the journalism we do is costly, we invite readers for whom The Times of Israel has become important to help support our work by joining The Times of Israel Community.

For as little as $6 a month you can help support our quality journalism while enjoying The Times of Israel AD-FREE, as well as accessing exclusive content available only to Times of Israel Community members.

Thank you,
David Horovitz, Founding Editor of The Times of Israel

Join Our Community

Join Our Community

Already a member? Sign in to stop seeing this