Analysts at the research department of Bank Hapoalim attempted a summary of the impact the sharp shekel devaluation since the interest rate slash has had on Israeli economy.

In their paper the analysts are predicting the influence of the devaluation on the banks will be a mixed bag.

On the one hand, the real devaluation may lead to reduced effective tax rates in the fourth quarter (the positive rate gaps due to overseas investments are not included in the basic tax calculation), and to increased profits for some overseas bank branches.

On the other hand, the reduced repayment ability of some clients who borrowed foreign currency and do not have foreign currency revenues, may take its toll on the quality of credit portfolios. It may also increase the provision for doubtful debt, which will set off in part the improved repayment capability of some individuals who benefited from the shekel interest rate slash.

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The bank pointed out that Israeli Nasdaq-traded companies, dollar based companies whose shekel expenses are reduced by the devaluation, and real estate firms, whose businesses are prospering as potential buyers are driven to take action and buy, are expected to benefit from the sharp devaluation.

Any other time, the analysts are saying, such a devaluation could lead to market wide price hiking, which would have the Governor of the Bank of Israel immediately hiking the interest rate. But because of the deep recession in the market, prices are stable for the time being, and importers are absorbing the rate gaps, a fact likely to adversely affect their profits.

Other possible casualties of the devaluation are companies such as Koor Industries (NYSE:KOR), and the Israel Corporation's Oil Refineries (ORL), companies on dollar credit that make shekel reports, food manufacturers that find it hard to pass the price increase along to consumers, and insurance companies, who have to pay higher premiums to their agents, and whose deductibles vis-à-vis their agents become more expensive.