Bank of Israel Governor Amir Yaron said Tuesday that currency intervention to support the weaker shekel will only be necessary in the event of market failures.
His comments come shortly after the central bank held benchmark interest rates steady at 4.75% for the second consecutive month, in line with market expectations, although Yaron has hinted that further rate hikes may be necessary to bring inflation down.
The shekel has depreciated in recent months following Prime Minister Benjamin Netanyahu's decision to impose new legislation that severely weakens the Supreme Court.shekelHis comments come shortly after the central bank held benchmark interest rates steady at 4.75% for the second consecutive month, in line with market expectations, although Yaron has hinted that further rate hikes may be necessary to bring inflation down.
Feeling out of the loop? We'll catch you up on the Chicago news you need to know. Sign up for the weekly"The shekel has had a long relationship with the financial markets abroad, it has been tied to that. That link has weakened significantly since the beginning of the year.
"We believe that we should let the market try to figure out that risk premia," he added, noting that markets appear to have"functioned well" in recent months despite the increased volatility. "However, if there will be market failures, which we have not seen thus far or very significant movements that really impede on inflation, then we have the tools to deal with that."
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