The Bank of Israel has reported that it bought $4 billion in foreign currency in November to moderate the strengthening of the shekel. Despite a $2.27 billion downward revaluation of the foreign exchange reserves, the purchases boosted the reserves to a record $208.8 billion.
Last month's foreign currency purchases were made even though the Bank of Israel had already completed the $30 billion foreign currency purchasing program for 2021 announced in January. The rate of foreign currency purchases last month harked back to the first half of the year when the Bank of Israel was buying $5 billion per month.
The latest data makes it clear that the Bank of Israel was not prepared to sit on the sidelines as the shekel climbed to its strongest against the dollar in 26 years and against the euro in 20 years.
The biggest intervention came on November 8 when the shekel-dollar rate fell to NIS 3.08/$ but moved back above NIS 3.10/$ after the intervention. The Bank of Israel declined to comment at the time.
Several days afterwards, Bank of Israel Governor Prof. Amir Yaron told a conference at Tel Aviv University. "As we have already show, the $30 billion threshold does not represent the upper limit to the level of intervention. At every moment we are examining developments on the foreign currency market and the bank continues to conduct its policy according to the situation of the economy and continued economic operations. We will not be indifferent to changes that do not match the basic data of the economy."
Published by Globes, Israel business news - en.globes.co.il - on December 7, 2021.
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