Shekel Sinks to 4 Per Dollar as Traders Test Israel
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Israel shares a few key economic similarities with the European Union: growth is slumping, consumer prices are falling and benchmark interest rates hover around zero.
So when European Central Bank policy makers unveiled last week an unprecedented quantitative-easing program in a bid to fuel growth, weakening the euro in the process, one of the currencies that fell the most with it was the shekel. It slumped to 4 per dollar for the first time in two years on Jan. 23 as traders speculated that Israel’s central bankers could implement further stimulative policies of their own to bolster the economy.