The Bank of Israel stepped up foreign currency purchases in August, although the shekel strengthened slightly. The Bank of Israel reported that it bought $1.64 billion in foreign currency in August, after buying only $500 million in July. Nevertheless, August's foreign currency purchases were still well below the average in the first six months of 2021, when the Bank of Israel bought $25 billion in foreign currency.
The shekel is currently trading just above NIS 3.20/$, its strongest in the eight months since January, when the Bank of Israel announced that it would buy $30 billion in foreign currency in 2021. Since then the bank has purchased over $27 billion in foreign currency in efforts to assist exporters and moderate the strengthening of the shekel, and has said that its foreign currency purchases in 2021 will likely exceed $30 billion.
Israel’s foreign exchange reserves at the end of August 2021 stood at a record $205.9 billion, up $4.217 billion from their level at the end of the previous month. The reserves represent 46.8% of GDP, the Bank of Israel said.
The increase was the result of the $1.641 billion in foreign exchange purchases, a $2.613 billion allocation by the IMF, and a revaluation that increased the reserves by approximately $392 million. The increase was partly offset by private sector transfers of $203 million and government transfers abroad totaling $226 million. Over the past 12 months Israel's foreign currency reserves have risen from $161.7 billion to $205.9 billion.
Published by Globes, Israel business news - en.globes.co.il - on September 6, 2021
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