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.”
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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.