The Bank of Israel announced today that it will purchase $1.5 billion in foreign currency in 2018 to offset the impact on the balance of payments resulting from natural gas production. This is part of the Bank of Israel's program announced in May 2013.
The Bank of Israel said, "The Bank of Israel projects that the overall effect of natural gas production on the balance of payments in 2018 will be $1.5 billion, an amount identical to the Bank’s assessment of the effect on the balance of payments in 2017, and it will purchase foreign currency during 2018 accordingly."
The Bank of Israel said that, "It will continue to operate in the foreign exchange market in situations of exchange rate fluctuations that are not in line with fundamental economic conditions or when the foreign exchange market is disorderly."
In other words, the Bank of Israel will also continue to purchase additional foreign currency to weaken the shekel and help exporters.
Earlier this month, the Bank of Israel reported that its foreign exchange reserves had reached a record $111.31 billion at the end of October, although foreign currency purchases it made last month were a relatively modest $260 million, the entire sum bought as part of the purchase program intended to offset the effects of natural gas production on the exchange rate.
Published by Globes [online], Israel business news - www.globes-online.com - on November 23, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017