Bank of Israel slows forex purchases

Shekel-dollar ASAP Creative

Israel's foreign exchange reserves have risen to a record $213 billion, the Bank of Israel reports.

Israel's foreign exchange reserves climbed to a record $213 billion at the end of 2021, the Bank of Israel reports. The foreign exchange reserves rose $4.25 billion in December 2021 but only $739 million in foreign exchange purchases contributed to the amount (the rest was a revaluation that increased the reserves by $1.161 billion, private sector transfers of $2.2 billion and government transfers from abroad of $157 million).

December saw a clear slowing in foreign currency purchases by the Bank of Israel, after it bought $4 billion in foreign currency in November and $30 billion in the ten months before that in efforts to moderate the strengthening of the shekel. Despite these huge foreign currency purchases, the shekel strengthened 3% against the dollar in 2021, 10% against the euro and 9.4% against the Japanese yen.

The shekel was strengthened by the current account surplus, to a large extent due to the rise in exports of tech services, and this is expected to continue. The shekel has also been strengthened by the rise in overseas stock markets and the need of Israeli institutional investors to hedge their overseas investments by buying shekels and selling foreign currency.

Published by Globes, Israel business news - en.globes.co.il - on January 6, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

Shekel-dollar ASAP Creative
Shekel-dollar ASAP Creative
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