Israel's currency shekel down 5% since beginning of clashes

By Gokhan Ergocun

DUBAI, United Arab Emirates (AA) - Israel's shekel, which was at 3.84 to the US dollar on Oct. 6, saw the 4.03 level on Wednesday, a drop of 5% in 12 days.

Since Hamas started the Operation Aqsa Flood on Oct. 7 against Israel, Israel's economy has been facing stronger headwinds.

The country's benchmark index, the TA-35, dropped around 7.2% over the same period from the 1,830 level to 1,700.

The Bank of Israel had to intervene in markets last week to inject billion of US dollars to rebalance the shekel's value.

Ratings agency S&P on Wednesday also warned about geopolitical risks of ongoing clashes between the parties in Israel and Palestine.

The Bank of Israel's current interest rate is at 4.75%, but some experts predict a decline in rates to improve economic activity in the country.

The country's CDS risk premium for 10-year bonds was at the 75 level last month and 85 at the beginning of the conflict, but over the last 10 days shot up to above the 150 level, even reaching as high as 158.