Bank of Israel zero forex purchases continue

The Bank of Israel has published its foreign exchange reserves for the end of march, showing that for the second successive month the bank made no foreign currency purchases in order to moderate the strengthening of the shekel.

The Bank of Israel’s non-intervention in the foreign exchange market comes after its announcement that it is also reducing monetary expansion and on Monday the Bank of Israel Monetary Committee is expected to raise the interest rate from its historic low of 0.1%.

The Bank of Israel’s foreign exchange reserves fell $ 910 million in March to $ 206.1 billion, which represents 42.8% of GDP. The decline was the result of a revaluation that decreased the reserves by $ 1.601 billion and government transfers abroad totaling $ 122 million, offset by $ 813 million in private sector transfers.

Bank Hapoalim chief financial markets strategist Modi Shafrir said, “Due to the recovery of the stock markets worldwide in March, the shekel strengthened by 2.2% against the basket of major currencies (after being devalued in January and February) but the Bank of Israel chose not to purchase foreign currency for two reasons. The first is that the Bank of Israel is in a process of reducing monetary expansion and buying foreign currency is a form of monetary expansion. Secondly, despite the appreciation in March, the shekel is still 1.5% weaker than at the start of the year against the basket of currencies. “

Last year the Bank of Israel purchased $ 35 billion in foreign currency to help exporters by moderating the strengthening of the shekel. For much of the year, the Bank of Israel bought an average of $ 5 billion in foreign currency per month. But with the shekel weakening in 2022, the Bank of Israel bought only $ 356 million in foreign currency in January 2022, after buying $ 739 million in December 2021.

Published by Globes, Israel business news – en.globes.co.il – on April 7, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.


The Bank of Israel has published its foreign exchange reserves for the end of march, showing that for the second successive month the bank made no foreign currency purchases in order to moderate the strengthening of the shekel. The Bank of Israel’s non-intervention in the foreign exchange market comes after its announcement that…

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