As of tomorrow, the Israeli government will cease its policy of purchasing $100 million per day. The program, started in July 2008, was meant to ensure that the worth of the shekel would not drop significantly by backing-up the currency. Due to stabilization in the economy, the Bank of Israel decided to end the program, according to reports. However, the Bank does intend to periodically invest in foreign currency, dependent on fluctuations in the economy.
Following the announcement, the shekel-dollar exchange rate dropped nearly 1-percent to 3.88 shekels to the dollar. As a frame of reference, during the height of the recession, the shekel dollar exchange rate plummeted to approximately 3.2 shekels to the dollar. Approximately two years ago, prior to the global economic downturn, the shekel-dollar exchange rate was about 4.3 shekels to the dollar.
Last summer, the Israeli government released a new two-shekel coin, worth approximately 50-cents. When the dollar reached its low-point, Israelis jokingly started referred to the newly minted coin as the ‘dollar.
