Bank of Israel Published today the foreign currency balances held by the bank. The bank’s foreign currency balances decreased in February and amounted at the end of February in the amount of approximately $196.3 billion, a decrease of approximately $4.7 billion compared to the end of the previous month.
In January, the balances stood atsalvo for a total of 201 billion dollars. The Bank of Israel reports that the decrease is mainly due to the revaluation of currency balances and the government’s transfers abroad. These data are very relevant recently as the bank can use the exchange rate balances in its possession to intervene in the exchange rate market and balance deviations from the trend line of the exchange rate.
The many foreign currency balances that are in the possession of the bank result from many purchases made by the bank during the Corona period. The bank purchased billions of dollars to moderate the dollar’s plunge during the Corona crisis when the US Central Bank (Fed) printed dollars and fed the American economy.
The announcement of the amount of foreign exchange balances comes against the background of the many fluctuations occurring in the foreign exchange market. Sources in the market claimed that the shekel’s crash was a direct result of the legal reform. When the increase in the currency remained unexplained, it was suggested among economists that the Bank of Israel intervened in the foreign exchange market, in order to stabilize the fluctuations in the market and the weakening of the shekel against the dollar in recent months.