Israeli assets declined Tuesday as investors mulled a bill passed by parliament that will weaken the power of judges and that’s sent hundreds of thousands of Israelis to the streets in protest.
The shekel slipped for a fourth day, dropping as much as 1.1% to 3.6974 per dollar as of 11:25 a.m. in Tel Aviv, the biggest loss among some 150 currencies tracked by Bloomberg.
The nation’s local currency bonds also dropped, weakening by the most since February as of Monday’s close. The benchmark stock index was down 1.4%, also the poorest performance in the world among primary indexes monitored by Bloomberg.
On Monday, Prime Minister Benjamin Netanyahu’s right-wing coalition scrapped a law that allowed judges to void ministerial decisions they considered “unreasonable,” effectively removing judicial oversight over elected politicians’ decisions.
The government says the reasonableness law is just the first step. It also wants to increase the ability of politicians to select judges and make it harder for the Supreme Court to overturn legislation. Opponents say such legislation undermines Israel’s democracy and could imperil its status as a magnet for tech investments.
Israel in ‘Twilight Zone’ as Investors Fret Over Judicial Law
The shekel’s one-month implied volatility has jumped by the most in over a year in the past two sessions, rising to the highest since April 17. The one week measure has spiked to make it top three in the world behind Russia’s ruble and Turkey’s lira.
