Fears of a constitutional crisis drive shekel to three-year low

The shekel falls to the lowest level in more than three years as hopes for a judicial overhaul compromise to prevent a constitutional crisis dissipate and amid growing tensions ahead of a high-profile High Court of Justice hearing next week.

The shekel depreciates more than 1% today to around 3.85 against the US dollar, trading around the weakest since March 2020.

Political uncertainty around the government’s contentious judicial overhaul has seen the currency drop more than 9% against the greenback since the start of the year.

The Tel Aviv Stock Exchange’s benchmark TA-125 index and the TA-35 index of blue-chip companies declined 0.7%, while the TA index of the five largest banks was down 1.4%.

Local analysts and economists linked the sharp depreciation of the local currency over the past day to a combination of two factors: heightened domestic political turmoil and a decline in world stock indexes.