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BoI sold no forex in December, reserves jumped above $200b

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After two months in which the Bank of Israel intervened in the domestic foreign exchange market, the central bank did not sell any foreign currency in December. Mainly due to a large revaluation that increased the reserves by $5.70 billion, Israel’s foreign exchange reserves rose by $6.468 billion in December to end the year on $204.367 billion, the Bank of Israel reports, up from $194.218 billion at the end of December 2022.







At the start of the war in October, the Bank of Israel launched a plan to sell up to $30 billion of its foreign exchange reserves on the forex market amid concerns that the war would lead to a sharp depreciation of the shekel. The Bank of Israel’s decision itself provided stability to the market and the shekel quickly recovered to its level on the eve of the war and in recent weeks has strengthened further.

In total the Bank of Israel sold foreign currency worth $8.5 billion in October and November – $8.2 billion in October and $300 million in November.

The Bank of Israel has also published a follow-up of the other monetary plans it provided during the war. The data show that beyond the first month of the war the swap mechanisms offered by the Bank of Israel were barely used – just a few tens of millions of dollars.

In addition, another program offered by the bank at the beginning of November for small businesses resulted in loans totaling NIS 2 billion during December. The program offered monetary loans to banks of up to NIS 10 billion at a particularly attractive interest rate, against a loan for small businesses.

The measures presented by the Bank of Israel were seen as important steps that contributed to the stability of Israel’s economy. The Bank of Israel saw loans to small businesses as mitigating measures, as it was unable to lower the interest rate in 2023. The Bank’s decision to allow loans to businesses through concessions to banks provoked sharp criticism from the government, and the Knesset Economic Committee even threatened that without a response from the bank to the non-bank entities, they would resort to legislation.

Published by Globes, Israel business news – en.globes.co.il – on January 7, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.


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