For the second time since the start of the war two and a half years ago, the Bank of Israel has intervened in one of the foreign currency submarkets, the Repo market, according to the monthly forex report it published earlier today. The Bank of Israel carried out repo transactions worth about NIS 200 million in March (about $64 million), the month in which the Iran war was underway, and which has not yet officially ended. The previous time the Bank of Israel undertook a similar step in the repo market was in October 2023, when it carried out transactions worth about NIS 95 million.
This is not a significant intervention. In October 2023, when the war broke out, the Bank of Israel’s main intervention was through the direct sale of a more significant $8.2 billion in foreign currency in the market, as part of a maximum program of $30 billion that was not fully utilized. That month, the shekel-dollar exchange rate crossed the NIS 4/$ threshold, but the Israeli currency has since strengthened, and on Friday it was trading around NIS 3.03/$ - a decrease of about 25% from the start of the war.
A fall from record forex reserves
During the war, the Bank of Israel also carried out additional foreign exchange sales in smaller volumes: about $300 million in November 2023, and also in June 2025, during the Iran campaign. The foreign exchange sales program actually ended last June.
The repo market is different from the direct sale of foreign currency. These are transactions with institutional bodies, pension funds, provident funds and mutual funds, against collateral of government or corporate bonds. As part of the transactions, the Bank of Israel injects immediate liquidity into these bodies, effectively a kind of redemption of the security that is supposed to be repaid at a later date, and in exchange, it returns the security after a predetermined period to the institutional body, after market fluctuations have stabilized. The Bank of Israel notes that the repo transactions are made "with the aim of maintaining the proper functioning of the markets."
The Bank of Israel also operates a dollar/shekel swap program, which has not been activated since October 2023. In that month, swap transactions totaling $400 million were carried out.
Despite the extraordinary repo intervention last month to inject liquidity into the markets, this was still a negligible amount. NIS 200 million in repo transactions is a tiny amount in the vast mountain of foreign currency reserves held by the Bank of Israel.
The bank also reported that its foreign exchange reserves at the end of March totaled $228.271 billion, a decrease of $6.274 billion from the record $234.545 billion at the end of February. The decrease was due to a negative revaluation of asset values, only partly offset by the government’s foreign exchange activities. These forex reserves account for 37.2% of Israel's GDP.
From a broader perspective, the Bank of Israel has intervened in the markets only a few times in the past decade. For example, in 2020 during the Covid pandemic, the bank intervened and injected dollars through swap transactions (SWAP) to financial institutions that were suffering from a squeeze. Less than a year later, when the shekel recorded a sharp appreciation and touched an exchange rate of NIS 3.11/$, the bank purchased foreign currency to stem the appreciation.
Published by Globes, Israel business news - en.globes.co.il - on April 12, 2026.
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