Despite a 4% depreciation of the shekel during August, the Bank of Israel did not buy any shekels from its foreign exchange reserves to strengthen the Israeli currency.
Israel’s foreign exchange reserves at the end of August 2023 stood at $202.856 billion, down $1.809 billion from their level at the end of July, the Bank of Israel reports. The level of the reserves relative to GDP was 38.9%.
Thus despite a 4% depreciation of the shekel during August, the Bank of Israel did not buy any shekels from its foreign exchange reserves to strengthen the Israeli currency. The fall in the reserves, the Bank of Israel said, was mainly the result of a revaluation that decreased the reserves by $2.096 billion. The decrease was partly offset by government transfers from abroad totaling approximately $341 million.
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In 2021 the Bank of Israel purchased $35 billion in foreign currency to help exporters, by moderating the strengthening of the shekel. Israel’s foreign exchange reserves reached a record $213 billion in December 2021.
Earlier this week Governor of the Bank of Israel Prof. Amir Yaron insisted that the central bank would not work in the opposite direction by buying shekels unless there was a market failure.
Published by Globes, Israel business news – en.globes.co.il – on September 7, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.
Bank of Israel credit: Shutterstock
