The Bank of Israel today reported that foreign exchange reserves at the end of August 2009 stood at $56.4 billion, an increase of $4.3 billion from their level at the end of July, and an all time record.
The central bank, led by Governor of the Bank of Israel Prof. Stanley Fischer, reported that it purchased $4.07 billion on the market in August, while a revaluation of the reserves and income totaled $241 million. The total was reduced slightly by $6 million in private sector transactions and government transfers abroad of $1 million.
August was a watershed month for the Bank of Israel, which on August 11 discontinued its policy begun in March 2008, of intervening consistently on the market and buying $100 million in foreign currency per day. The central bank switched to a policy of random purchases after announcing, "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."
As a result of the new policy, the Bank of Israel's purchases of $4.07 billion in foreign currency in August were nearly double the $2.1 billion purchased in July. Israel's foreign currency reserves have now risen from $28.46 billion at the end of 2007 to $42.34 billion at the end of 2008 to a record $56.4 billion at the end of last month.
Published by Globes [online], Israel business news - www.globes-online.com - on September 6, 2009
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