BoI to buy $1.5b foreign currency in 2017

Bank of Israel photo: Ariel Yerusalimsky

The Bank of Israel will purchase the foreign currency to offset the effect of gas sales on the balance of payments.

The Bank of Israel projects that the overall effect of natural gas production on the balance of payments in 2017 will be $1.5 billion, and says it will purchase accordingly. This is part of the plan announced in May 2013 to purchase foreign exchange in coming years in line with the estimated effect of natural gas production on the balance of payments.

The projection was affected by, among other factors, the drop in global energy prices, which decreases the effect of natural gas production in Israel on the exchange rate. The Bank’s assessments of the total impact on the balance of payments resulting from natural gas production and the foreign exchange purchases will be updated periodically and reported to the public.

This purchase program is an additional instrument of the Bank of Israel’s monetary policy and of exchange rate policy which is consistent with it. The Bank of Israel will also continue to operate in the foreign exchange market in situations of exchange rate fluctuations which are not in line with fundamental economic conditions or when the foreign exchange market is disorderly.

The Bank of Israel's foreign currency reserves totaled $97.963 billion at the end of October.

Published by Globes [online], Israel business news - www.globes-online.com - on November 14, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Bank of Israel photo: Ariel Yerusalimsky
Bank of Israel photo: Ariel Yerusalimsky
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