BoI stepped up foreign currency purchases in August

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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