Israel’s foreign exchange reserves fell for the first time since November 2016 last month, the Bank of Israel reports. Foreign exchange reserves at the end of February 2018 were $116.292 billion, down $1.329 billion from their level at the end of January 2018. The reserves represent 33.1% of GDP.
The fall was the result of a revaluation that decreased the reserves by about $1.327 billion; government transfers abroad of $292 million; and private sector transfers of about $14 million. The decrease was offset by foreign exchange purchases by the Bank of Israel of $304 million, as part of the purchase program intended to offset the effects of natural gas production on the exchange rate.
Earlier this week, Prico Risk Management and Investments CEO Yossi Fraiman said that the Bank of Israel would need to buy $2-3 billion per month in foreign currency to prevent the shekel from strengthening. In January the Bank of Israel purchased $1.8 billion in foreign currency, which saw the shekel move up above NIS 3.50/$ in early February. But with only $304 million in foreign currency purchases, the shekel is again strengthening.
This afternoon, the Bank of Israel set the shekel-dollar representative rate down 0.086% from yesterday's exchange rate at NIS 3.466/$ and set the shekel-euro rate up 0.219% at 4.301/€. In afternoon inter-bank trading, the shekel continued strengthening against both the dollar and the euro. The shekel-dollar rate is down 0.25% from today's exchange rate at NIS 3.458/$ and the shekel-euro rate is down 0.13% at 4.296/€.
Published by Globes [online], Israel business news - www.globes-online.com - on March 7, 2018
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