For the First Time Since the Corona Crisis: The Bank of Israel Intervenes in the Foreign Exchange Market - Buying $801 Million Worth

Translation of SadaNews Economics - The Bank of Israel entered the foreign exchange trading market last May for the first time since the Corona virus crisis, purchasing an amount worth $801 million. A senior "Israeli" official at the Bank of Israel explained to the Hebrew website "Yedioth Ahronoth" that the intervention was not driven by a desire to influence the exchange rate, which has recently declined, as is usually the case, but rather due to "discovering irregular activity in the foreign exchange market that necessitated intervention in trading," according to the translation by SadaNews, as reported by the newspaper.

The Bank of Israel refrained from describing the intervention as "speculation activity" in the foreign exchange market, but foreign exchange experts claimed that this is, in fact, the interpretation of the ambiguous phrasing regarding the circumstances of this rare intervention.

The Bank of Israel also issued a statement today clarifying that the foreign currency reserves for May amounted to $238.681 billion at the end of the month, an increase of $2.953 billion compared to the end of the previous month, and the ratio of reserves to GDP stood at 37.2%, according to the translation by SadaNews.

The central bank explained the increase in balances as follows:
Revaluation of foreign currency reserves amounting to approximately $2.685 billion.

Purchases of foreign currencies by the Bank of Israel valued at approximately $801 million, which were made in May on a discretionary basis to maintain the ongoing regular activity of the markets.

The increase was partially offset by government foreign exchange operations amounting to approximately $721 million.

Meanwhile, brokers claim that the "Israeli" Bank also intervened in trading last Friday, contributing to the sudden rise of the dollar to a price above 2.90 shekels per dollar, after it had already fallen to below 2.80 shekels in trading last week.

The Bank of Israel refrained from commenting on this, noting that it does not disclose its activity in the foreign exchange market except in the monthly report published at the beginning of each month, according to the translation by SadaNews.