The government decided Wednesday to link the Shekel to a basket of currencies of its major international trading partners instead of solely to the U.S. Dollar, the current alignment. The objective of the new linkage is to reduce the inflationary impact of the ongoing rise in the non-Dollar currencies.
The Dollar will comprise 60 percent of the new basket of currencies, while the German Mark will comprise 20 percent, the British Pound Sterling 10 percent, and the French Franc and the Japanese Yen each constituting 10 percent of the basket.
Israel hopes that the new alignment will bring inflation down to below 10 percent a year, as inflation has been partially caused by the Shekel falling against the non-Dollar currencies.
According to economic observers in Jerusalem, the new linkage reflects faith in the stability of the Shekel achieved by the government’s current economic program.
As the Year Turns, Support the Journalism You Trust. JTA covers the stories shaping Jewish life around the world — with the depth this moment calls for. As you reflect on the year ahead, consider a gift that keeps independent Jewish journalism strong.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
