The Bank of Israel today announced that it will "from tomorrow discontinue its program of daily purchases of $100 million in the foreign exchange market which began in July 2008." The announcement follows the announcement last week that "the Bank of Israel will act in the foreign exchange market in the event of unusual movements in the exchange rate which are inconsistent with underlying economic conditions, or when conditions in the foreign exchange market are disorderly."
The shekel-dollar exchange rate fell 0.70% to NIS 3.885/$ following the announcement and the shekel-euro exchange rate fell 2.12% NIS 5.501/€.
A Bank of Israel source said, "The situation is back to normal. The program was more suited to other times, so we stopped the purchases."
Bank of Israel said that it would still intervene "when necessary", but that it would not announce when, except in its monthly foreign currency reserves announcements.
Published by Globes [online], Israel business news - www.globes-online.com - on August 10, 2009
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