The Tel Aviv Stock Exchange and the foreign exchange market have seen a decline in their trading since yesterday, according to a report published by the Israeli economic platform Globes.
According to Globes, this deterioration came amid growing fears of political changes, as reports indicated the possibility of dismissing Defense Minister Yoav Galant and replacing him with Gideon Sa’ar, head of the “New Hope” party.
Before the publication of these reports, the shekel fell by 0.5% against the US dollar, but the decline worsened to reach 1% as the day went on.
On the stock exchange, the Tel Aviv 35 Index fell more than 1% after the reports, although it had been on the rise during the morning.
This negative trend continued today, as the index fell by 0.65% and the shekel fell slightly against the US dollar and the euro as well.
“The dismissal of the defense minister reinforces the assessment that we will not reach a ceasefire agreement in Gaza and may begin an additional campaign in the north, which could lead to a credit rating downgrade and thus a decline in the stock market,” said Jonathan Katz, chief economist at Leader Capital Markets.
Katz added that the possibility of increased risk levels in Israel is raising investor concerns, and that this potential ministerial change could contribute to increased uncertainty.
Political chaos
For his part, Yossi Frank, head of financial risk management at Energy Finance, said, “Galant’s dismissal is understood by investors as political chaos and increases the chances of a war breaking out in Lebanon.”
He added that what is happening in the market is nothing but the activity of speculators who are betting on confusion.
“Nobody buys dollars except them. Financial institutions sell, exporters sell, and the CPI should have strengthened the shekel, but when the market is in a state of confusion, anyone can do what they want,” he continued.
This market turmoil coincides with the ongoing war on Gaza, which increases economic and political uncertainty in Israel.
These developments point to growing concerns about financial stability in Israel, amid ongoing political and security pressures.
