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Strategies & Market Trends : The Millennium Crash -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (3674)	10/11/1998 11:14:00 PM
From: set	Read Replies (1) \| Respond to of 5676

really don't know. I recall there was a panic a little over a month ago over the gov't plans to let the shekel float. I don't know the timetable for that or if this is related though. Shahar

To: Moominoid who wrote (3674)	10/11/1998 11:36:00 PM
From: Arcane Lore	Read Replies (1) \| Respond to of 5676

Two articles from Oct. 9 with different perspectives on whether dollar linked loans are a future or a present problem : ... The shekel has so far this month lost 11.37% against the dollar and 13.87% against the basket. Since January 1, the shekel fell 21.92% against the dollar and 26.56% against the basket. Traders said the main fear is that companies which borrowed foreign-currency linked loans will rush to buy dollars in an attempt to prevent more losses, thus creating a vicious cycle which would further accelerate the shekel's fall. ... jpost.com ===== ... The shekel began to slide when foreign investors recently started liquidating their investments in Israeli stocks, as they have been doing in emerging markets across the globe. First, they sold shares on the Tel Aviv Stock Exchange. Then they bought dollars with the shekels received from the shares, pushing down the price of the shekel. Israeli companies nervously watched the shekel's movements. Many, lulled into a false sense of security during the past two years when the shekel was relatively stable, took out foreign currency-linked loans to finance their activities. As the shekel depreciates, these loans quicky become more expensive to repay, and high financing costs could take a bite out of corporate earnings. This is why many companies have been buying foreign currency -- to protect themselves should the shekel sink lower. However, this also contributed to the shekel's further decline. ... jta.org