Data from the Bank of Israel published yesterday (Monday) in Vint show that in February the bank did not purchase a single dollar in the foreign exchange market. This is the first time since 2019 that the Bank of Israel has not intervened in foreign exchange trading for an entire month, after months in the last two years in which the central bank purchased billions of dollars in one month to protect Israeli exports and prevent the shekel from strengthening further.
In all of 2021, the Bank of Israel purchased $ 34.8 billion – an all-time record. The high purchases led to criticism from the State Comptroller and the International Monetary Fund, who argued that it was not true that the Bank of Israel artificially set the shekel exchange rate against foreign currencies at a higher rate than the situation in the free market. With the start of the gas deposit in Israel and its sale for billions of dollars abroad, the Bank of Israel decided to purchase millions of dollars every month to prevent the domestic market from flooding in dollars and causing the shekel to rise.
The Bank of Israel’s data also show that Israel’s foreign exchange reserves totaled $ 207,065 billion at the end of February 2022, a decrease of $ 1.692 billion compared to the end of the previous month. The level of balances in relation to gross domestic product was 45.1%.