The Bank of Israel again intervened in the foreign currency market today, buying more than $200 million, outside its regular dollar purchases to offset the effect of gas sales from the Tamar field. The reason for the unusual intervention is the steady strengthening of the shekel against the dollar. In inter-bank trading today, the shekel again strengthened against the dollar, after the US postponed its strike against Syria.
The Bank of Israel intervened in two waves: once at 10:30 am, and again at 12:15 pm.
This is the first time since June that the Bank of Israel has intervened in the foreign currency market with an extraordinary purchase of dollars to ease extreme volatility in the market.
The Bank of Israel is buying $200 million a month to offset the effect of gas sales from the Tamar field on the foreign currency rate, butthese purchases are spread over several days and have no unusual effects on trading.
Today, the Bank of Israel's intervention caused a momentary weakening of the shekel against the dollar, but the shekel subsequently strengthened again. On Friday, US President Barack Obama decided to seek Congressional approval for an attack on Syria, which lowered the risk premium on the Israeli market and caused the shekel to strengthen.
In early afternoon inter-bank trading, teh shekel-dollar exchange rate was down 0.12%, compared with yesterday's representative rate, at NIS 3.61/$, and the shekel-euro exchange rate was down 0.22% at NIS 4.773/€.
Published by Globes [online], Israel business news - www.globes-online.com - on September 2, 2013
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