Israel’s foreign exchange reserves at the end of March 2020 stood at $126.043 billion, down $5.215 billion from their record level at the end of February, the Bank of Israel reports. The reserves represent 31.9% of GDP, down from 33.2% at the end of February.
The decrease was the result of an injection of short-term dollar credit totaling $7.5 billion into the financial system to help institutional investors and banks meet their overseas positions on falling world markets in the wake of the coronavirus crisis. This is the largest ever single monthly fall in Israel's foreign currency reserves. Furthermore, a revaluation decreased the reserves by $2.328 billion.
The decrease was partly offset by private sector transfers of approximately $2.321 billion and government transfers from abroad totaling approximately $1.408 billion. In addition, foreign exchange purchases by the Bank of Israel totaled $974 million.
In the six months up to and including early March, the Bank of Israel purchased $11 billion in foreign currency in order to weaken the shekel. A policy that suddenly went into reverse in March in order to strengthen the shekel, which had come under fire in the coronavirus crisis.
Despite the sharp falls in the reserves last month, they have still risen from $118 billion to $126 billion over the past 12 months.
Published by Globes, Israel business news - www.globes-online.com - on April 7, 2020
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