Israeli stock indexes also down as coalition looks to delay judicial panel selection

The shekel is weakening and Israeli shares decline today amid investor concern that the government is pushing off a vote on the selection of lawmakers to sit on the judicial selection panel, seen central to efforts to reach a compromise on the contentious plans to weaken the country’s legal system.

The local currency weakens more than 2 percent in intraday trading and is trading around 3.63 against the greenback, down from the Bank of Israel representative exchange rate set at 3.5580 yesterday. The Tel Aviv Stock Exchange’s benchmark TA-125 index falls 0.5% and the TA-35 index of blue-chip companies slips about 0.4%. The TA index of the five largest banks is down 1.3% and the TA-Finance dropped 1.1%.

The Knesset began voting on the candidates for the Judicial Selection Committee, with only Likud MK Tally Gotliv from the coalition and Yesh Atid MK Karine Elharrar from the opposition remaining in the race after all other coalition contenders dropped out. Prime Minister Benjamin Netanyahu, who opens the voting, has instructed the coalition to vote both candidates down, which would lead to a second round of voting in 30 days.

Following the move, opposition leader Yair Lapid accused Netanyahu of “causing” judicial overhaul negotiations to end. Meanwhile National Unity party leader Benny Gantz threatened that if the coalition moves ahead with its plan to push off a vote on the members of the Judicial Selection Committee his party will quit the ongoing judicial overhaul negotiations.

The shekel has been swinging from losses to gains around the developments on reaching a compromise on the proposed judicial overhaul. Last week, the shekel gained amid signs that the judicial changes would not be advanced as planned and amid cautious optimism that a compromise was being negotiated.