The Bank of Israel’s foreign exchange reserves totaled about $ 208.8 billion at the end of November, an increase of about $ 1.3 billion compared to the end of October. This is the amount equivalent to 45.9% of the gross domestic product (GDP).
During the month, the bank purchased $ 4 billion in foreign currency – twice as much as $ 1.75 billion in October, which eventually crossed the $ 30 billion mark it announced earlier this year to provide certainty to local currency support markets in an attempt to prevent its over-maintenance. Israel at least for the activity of speculators – and not for the “ordinary” reasons for the strengthening of the shekel (strength of the local economy in the high-tech leadership, hedging of foreign exchange exposure of the institutional and more).
On the margins, another reason for the increase in foreign exchange reserves was private sector transfers of about $ 25 million. The increase was partially offset by revaluation of foreign currency reserves of about $ 2.27 billion and government transfers abroad of about $ 463 million.
The Bank of Israel has long said that as long as they need to, they will continue to purchase foreign currency beyond the specified quota. However, unlike the transparency approach from the beginning of the year, this time the bank prefers not to talk about their interventions in foreign exchange trading. Are that the Bank of Israel acted to rescue it from there and weaken it against the dollar.
On this data published now writes Ronen Menachem, Chief Economist of
Mizrahi Bank
+0.17%
Base:11,630
opening:11,720
Tall:11,720
low:11,620
change:27,695,895
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Because the purchase this time, outside the said plan, is much higher. The high volume of purchases in November indicates the determination of the Bank of Israel in this matter. I estimate that this was one of the reasons for halting the appreciation of the shekel later this month. In my opinion, the Bank of Israel is doing the right thing when it operates where it detects an over-appreciation of the shekel. Looking ahead, I expect that the Bank of Israel will continue to intervene in the foreign exchange market, even on large volumes and at random times. The data from today will make it clear to the markets that, unlike previous months, the shekel will not move in one direction. ”
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