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"Mobileye effect" further strengthens shekel

 15.3.17

FXCM: The Mobileye-Intel deal is likely to attract more investors to Israel, boosting the local currency.

 

 

The shekel has strengthened against the major currencies this morning. The shekel-dollar exchange rate is currently down 0.45% in comparison with yesterday's representative rate, at NIS 3.6615/$, and the shekel-euro rate is down 0.07%, at NIS 3.8986/€.

FXCM Israel says in its market review this morning, "The dollar-shekel pair retreated yesterday, dipping below NIS 3.66/$, despite the US dollar's stability on world markets in advance of the US Federal Reserve's interest rate decision on Wednesday. It is possible that the relative strength of the shekel is a manifestation of the "Mobileye effect", which elevated the mood on the local market."

It was announced yesterday that Israeli car automation technology company Mobileye (MBLY) is being sold to Intel for $15 billion, in the biggest ever acquisition of an Israeli company.

FXCM continued, "The State of Israel is expected, according to estimates, to gain a tax windfall of some $1 billion as a result of the deal. Moreover, the deal attracted worldwide publicity, which is likely to attract more investors to the Israeli market, further strengthening the shekel. Added to this is the announcement by Prime Minister Benjamin Netanyahu and Minister of Finance Moshe Kahlon that they intend to cut taxes, which will stimulate growth and boost investors' confidence in the local economy."

Published by Globes, March 14, 2017

Kahlon: Strong shekel is not a crisis

 15.3.17

Minister of Finance Moshe Kahlon convened a special discussion today on the impact of the appreciating shekel on Israeli industry.

 

Against a background of high volatility in the shekel-dollar exchange rate in the past few days, and the rate's drop to a low not seen in years, Minister of Finance Moshe Kahlon convened a special discussion today on the effect of the exchange rate on the Israeli economy. The shekel has strengthened sharply against the euro as well.

Among the participants in the discussion were Minister of the Economy and Industry Eli Cohen, Deputy Minister of Finance Yitzhak Cohen, Manufacturers Association of Israel president Shraga Brosh, Ministry of Finance director general Shai Babad, Commissioner of Capital Market, Insurance and Savings Dorit Salinger, Budgets Commissioner Amir Levy, Ministry of Finance chief economist Yoel Naveh, Accountant General Rony Hizkiyahu, Israel Tax Authority director Moshe Asher, and Israel Export Institute chairman Ramzi Gabbay.

The consequences of the strengthening of the shekel against the dollar and the euro for the Israeli economy were considered, and senior government officials surveyed the impact in their own areas of responsibility and presented possible solutions.

At the end of the discussion, Kahlon instructed that the Committee for Strengthening Industry headed by Babad should convene on Thursday. Kahlon decided that the committee should discuss how to allocate NIS 100 million budgeted for technological education, and an accelerated depreciation track for encouraging investment in industry.

"A strong shekel is not a crisis," Kahlon said, "It's a result of a strong economy. The Israeli economy has had one of the best years in its history, and the strengthening of the shekel is a direct result of the strong economic figures. At the same time, we cannot ignore the damage to exports, and alongside the Bank of Israel's short-term monetary actions, we must put our shoulders to the wheel to outline policies for strengthening industry and boosting productivity in the long term. The government of Israel will not abandon the exporters."

Brosh added, "I welcome the fact that the minister of finance called the meeting, and the teamwork and joint efforts towards strengthening the Israeli economy. Weaker foreign currencies threaten all sectors of industry, as there is no sector capable of absorbing appreciation of 10% against the euro or 15% against the pound sterling or even 5% against the US dollar.

"The solution is raising productivity, and that can come only if we invest immediate resources in education and technological training, and in reducing regulation. The high costs of production in Israel must be lowered, starting with municipal costs. I also call on the Bank of Israel to continue the monetary actions that are rescuing exports at this time. I ask that the Committee for Strengthening Industry should sit day and night in order to submit recommendations within a month, and thus provide both short-term and long-term solutions for Israeli industry."

Published by Globes, March 6, 2017

As shekel strengthens, overseas parcels come flooding in

 15.3.17

3.5 million parcels weighing 560 tons landed in Israel in February, up 15% from last year.

 

The dramatic fall in the shekel-dollar exchange rate is affecting various sectors of the economy, and encouraging Israelis to buy products in dollar prices, including tourism products and products and items sold on international websites.

Israel Postal Company figures show an increase in the quantity of packages landing in Israel in February. The Post Office attributes the increase to the ongoing fall in the shekel-dollar exchange rate and the timing of the Purim holiday, for which costumes are ordered from international websites.

3.5 million parcels weighing an aggregate 560 tons landed in Israel in February. 90-95% of the parcels purchased overseas by Israelis are delivered by the Postal Company, with the resting being delivered by international delivery companies.

The number of parcels delivered was 15% more than in February 2016. The timing of the Purim holiday and overseas orders for costumes also contributed to the recent increase in purchases, with more and more Israelis buying costumes from websites such as AliExpress and eBay. According to Postal Company figures, 55% of the parcels came from China, including tens of thousands of Purim costumes and accessories.

Published by Globes, March 7, 2017


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