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Just like a year ago, the shekel is taking on the attributes of a boulder unmovable by external buffeting. For weeks it's exchange rate has hovered between NIS 4.65 to NIS 4.75 to the dollar, a fact quantifiable by the drop to 7% of standard deviations in the shekel-dollar market.

The shekel's standard deviation, which measures its volatility, is smaller than the coins of more stable countries not groaning under the yokes of war or economic crisis, such as Japan's yen, Europe's euro or the British pound.

Right now, it looks like nothing could weaken the shekel, even though there are plenty of reasons for the dollar to gain ground against it. Saturday was another hot day on the security front, with one terror attack that succeeded, a failed assassination by Israel, a terror attack that was averted and many dead on the Palestinian side. The events were thoroughly covered by CNN and other foreign television stations but the shekel barely budged.

The economic news last week also arouses a not-short list of dangers. On the fiscal front, the Finance Ministry director-general Ohad Marani warned of serious ramifications for the markets if the Knesset balks at cutting the budget, or cuts back the cuts. The Bank of Israel chimed in with new figures showing that foreign currency is still pouring out of the country: despite the robustness of the shekel, Israelis sent $232 million abroad during July and a billion in the first seven months of the year, compared with NIS $380 million during the parallel period of last year.

As if that weren't enough, pressure on the banks has been mounting. All the banks reported a steep slide in results financing for the second quarter, some showing smaller profits and some showing losses. Now, after the collapse of Industrial Development Bank, no bank can be said to be unquestionably secure, not even the big ones.

In fact, banking-related risk is considered to be one of the biggest dangers floating over the forex market. Traders related the NIS 0.02 climb in the dollar's rate on Sunday (in shekel-dollar options trade on the Tel Aviv Stock Exchange the currency market is closed that day), mainly to the Industrial Development Bank events.

Speaking of which, for years Industrial Development Bank tried to position itself as a specialist in currency operations for the business sector. It ran a dealing room and even built a backup site in Petah Tikvah, inaugurated just a month ago, to take over in case of breakdown.

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That specialty, coupled with the fact that 74% of its NIS 12 billion credit extended to customers was linked to foreign currency, bolstered the confidence of currency market players not one whit. It only added to their jitters.

Market sources persist in claiming that it's the wide shekel-dollar interest rate gap that's shoring up the shekel. But there's one external development that could make all the arguments moot the start of an American attack on Iraq. Judging by the rhetoric coming from the States, the moment is approaching.

In recent weeks, banks specializing in global speculation have started to sniff around, scenting an opportunity to exploit the developments for profit. The result of their hunt may be surprising.

It turns out that in the whole Middle East, the shekel is the most liquid, negotiable coin. It is the only vehicle through which the timing of an attack on Iraq can be gambled on.

Some speculators may elect to gamble through crude, but for currency players, it's practically impossible to build short positions on Arabian currencies or bond markets. Their only option is the shekel-dollar market.

Only through Israel's shekel-dollar market, which has seen turnovers exceeding a billion dollars a day before, can the foreign banks move enough assets to make it worth their trouble.

At this stage, dealers say, the foreign banks are mainly asking questions. They have not yet begun to build up major positions ahead of an American attack.

But the wilder the winds of war blow, the greater the foreign interest will be in buying dollars against shekels in the Israeli market and the more evident it will be that liberalization, hefty volumes and sophistication of the currency market can sometimes cost a heavy price.