Bloomberg declared the Israeli Shekel to be the “World’s Worst Currency” after it went on an up and down ride last week. The Shekel had appreciated by 2.1% against the Dollar before falling 0.8% after the Bank of Israel intervened and bought $200 million.
“It’s the Bank of Israel against the market, ” Yariv Shalev, a currency dealer at Mercantile Discount Bank in Tel Aviv, told Bloomberg. “The central bank will continue to buy but we don’t see the dollar/shekel coming back to levels we’ve seen in the last week. The market does not believe in the interventions, and it knows the Bank of Israel is very limited.”
But Bloomberg did not explain why a currency which is gaining so much strength against the Dollar that its government needs to take steps to bring it back down is a bad one.
Perhaps it is only bad for currency speculators who bought Shekels hoping that the Israeli currency would continue to rise against the Dollar.