The dollar was trading at 4.01 shekels shortly before noon Friday, the highest rate since 2012.
The Bank of Israel reported Friday that it bought $1 billion worth of dollars last month in its currency war to make the shekel cheap and increase exports.
The shekel-rate sneaked across the 4.00 level last week but quickly receded.
The recent buying binge of dollars by the Bank of Israel has increased Israel’s currency reserves to a whopping $85 billion.
The shekel-dollar rate could rise as far as 4.10 or 4.20, according to some analysts, but a currency bubble is developing to the point that if and when the Americans stock market starts to tumble, investors in Israel will cash in and bring home shekels. The result would be a dive in the shekel-dollar rate, with the Bank of Israel being left with a huge pile of cheaper dollars that it can’t sell without driving the rate down even further.