TEL AVIV (Mar. 1)
The shekel was devalued Wednesday night, but by exactly how much has Israelis scratching their heads in bewilderment.
Finance Minister Shimon Peres and Professor Michael Bruno, governor of the Bank of Israel, called a joint news conference to announce that the central bank had decided to reduce the value of the shekel by 6 percent.
Based on the “stable exchange rate,” a “basket” of foreign currencies will now buy 2.1188 shekels, compared to 2.0649 at the time of the last previous devaluation in June 1989.
But since then, a series of “mini-devaluations” dropped the basket rate to 2.0964 as of the close of trading at noon Wednesday, a devaluation of only 4.5 percent.
At noon Thursday, the Bank of Israel announced a shekel-to-dollar ratio of 1.9626, a devaluation of only 0.2 percent since Wednesday. The shekel “basket” ratio was fixed at 2.0941, a change of only 0.1 percent.
But Bruno warned that this should not be taken as a norm. He said the low figure was the result of massive sales of foreign currency to the bank in the morning and the strengthening of the dollar against the West German mark.
The discrepancy between the two figures stems from the central bank’s freedom to fix fluctuations of up to 3 percent against the stable June rate, depending on the direction of currency flows.