Connect with us

Hi, what are you looking for?

Jewish Business News

Business

Goldman Sachs Blames Judicial Reform Plan for Shekel Dropping 8%

Shekel NIS

Goldman Sachs said the Israeli Shekel now reflects a risk premium due to the new judicial reforms being pushed through the Knesset by the government of Prime Minister Benjamin Netanyahu. The firm previously reported concerns about the Shekel and Israel’s economy for the same reasons, as did other financial powerhouses like JPMorgan.

As of now, the Shekel has lost more than 8% of its value against the US Dollar since the plan was first proposed and Israel erupted with mass demonstrations against it.

Please help us out :
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at office@jewishbusinessnews.com.
Thank you.

The government’s judicial reform plan would greatly curtail the power of Israel’s Supreme Court to nullify legislation passed by the Knesset and also limit the authority of Israel’s attorney general.

Israel’s opposition has said that the reforms, which would greatly curtail the authority of Israel’s Supreme Court and its Attorney General, would harm Israel’s democracy thereby eroding foreign confidence in the country and hurting its economy.

“The shekel’s performance in January was the worst of any currency against the dollar,” said a report by Goldman Sachs. “While significant political premium now looks to be embedded in the Israeli currency, risks remain for the shekel over the short run. The broader shekel trend this month clearly reflects not just global developments, but domestic ones.”

The Bank of Israel is expected to at some point step in and “save” the Shekel by buying up Shekels with hard foreign currencies it holds in reserve. On this possibility, the Goldman Sachs analysts wrote, “It remains unclear if or when FX interventions will be part of the discussion around the shekel. Tactical views on whether the currency will return to its ‘global tech anchor’ will require more clarity on expectations of domestic policy.”

Many Israeli firms have been taking their money out of the country, both out of fear of the Shekel’s stability and in protest.

Wiz, an Israeli cloud security startup and a unicorn, was reportedly taking its money out of Israeli banks. And just a week ago Israeli startup Papaya Global, a fintech unicorn that offers a cloud based platform for companies to handle their payrolls, was the first Israeli firm to decide to divest itself of Israeli banks due to the judicial reform plan proposed by Benjamin Netanyahu’s government.

Newsletter



Advertisement

You May Also Like

World News

In the 15th Nov 2015 edition of Israel’s good news, the highlights include:   ·         A new Israeli treatment brings hope to relapsed leukemia...

Entertainment

The Movie The Professional is what made Natalie Portman a Lolita.

Travel

After two decades without a rating system in Israel, at the end of 2012 an international tender for hotel rating was published.  Invited to place bids...

VC, Investments

You may not become a millionaire, but there is a lot to learn from George Soros.

Copyright © 2021 Jewish Business News