The Bank of Israel has reported that it bought $5.266 billion in foreign currency in April in its efforts to assist exporters and moderate the strengthening of the shekel.
The Bank of Israel has now bought $19 billion in foreign currency in 2021, after buying $21.2 billion in foreign currency in all of 2020. In January the Bank of Israel said that it planned buying $30 billion in foreign currency in 2021 but it has already bought nearly two thirds of this amount in the first third of the year and Governor Prof. Amir Yaron has admitted that foreign currency purchases for 2021 are now likely to exceed $30 billion.
The latest foreign currency purchases meant that at the end of April, Israel’s foreign exchange reserves rose $8.316 billion last month to a record $193.996 billion, representing 48.1% of GDP.
In addition to the foreign currency purchases of $5.27 billion, the rise included private sector transfers of $186 million and a revaluation that increased the reserves by approximately $3.129 billion, partly offset by government transfers to abroad totaling $265 million.
Over the past four months the shekel has traded against the dollar within the NIS 3.25-3.35/$ range. But despite the massive foreign currency purchases by the Bank of Israel, the exchange rate has shifted to the lower end of the range over the past week.
Published by Globes, Israel business news – en.globes.co.il – on May 6, 2021
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