The British Financial Times Praises Israel’s Economy
Illustration: Israeli New Shekel by RJA1988 (pixabay.com) via Needpix.com
According to a recent article in the British daily Financial Times, the Israeli shekel ranks as the best performing currency against the U.S. dollar among 31 major currencies tracked by Bloomberg, up almost 6%, as fund managers have sought refuge from global economic turmoil.
The shekel has strengthened thanks to Israel’s perceived status as an emerging market safe haven and improved economic fundamentals such as: a long term expansion in employment; current account surpluses; a fall in the Debt-to-GDP ratio under a 16-year-old fiscal stabilization program; and the Bank of Israel raising the interest rate only once since 2011, allowing it to hover near zero (0.25%) for years as the economy reaches near full-employment.
The British daily quotes Win Thin, head of currency strategy at New York’s Brown Brothers Harriman: “Israel is one of the best of the lot among emerging markets. It is stable and away from the fray of the trade wars. It has just been a good solid story.”
The Financial Times adds: “The haven status appears to be decoupled from political instability, including growing tensions with Iran; air and drone strikes attributed to the Israeli military in Syria, Lebanon and Iraq; inconclusive elections last April, and the possibility of Prime Minister Netanyahu facing indictment for alleged bribery and fraud.”
Even as investors remain concerned over the possibility of a global recession, that paper noted that Israel’s “tech-heavy export-driven economy has remained relatively immune. High-value exports, including military hardware, are generally unaffected by sudden appreciation in local currency, and are often priced in U.S. dollars to begin with.”
Israel’s foreign investment remains stable according to the Financial Times, and the Jewish State “continues to prepare for exports from natural gas deposits that are coming online, including a $15 billion contract to supply Egypt by early 2020. Such positive factors are pushing the shekel higher. This year’s next best performing major currencies, after the shekel, are the Russian ruble, Japanese yen and the Canadian dollar.”
Ambassador (ret.) Yoram Ettinger is the director of The Ettinger Report: Second Thought: a US-Israel Initiative Click here to read more of this writer’s work in The Jerusalem Herald.