Bank of Israel bought $356 million of FX in January

Israel Materials 7 February 2022 17:15 (UTC +04:00)
Bank of Israel bought $356 million of FX in January

The Bank of Israel said on Monday it bought $356 million of foreign currency in January as it tries to contain a strong shekel, Trend reports with reference to Reuters.

Despite the purchases, Israel's foreign currency reserves declined by $4.25 billion last month to $208.75 billion, or 45.7% of gross domestic product, after reaching a record $213 billion in December.

The central bank said that partly reflected a revaluation of the reserves that decreased the reserves by $3.75 billion.

The Israeli currency -- among the top performing currencies since the start of 2020 -- gained another 3% versus the dollar in 2021 even as the central bank bought $30 billion of forex to try to slow its appreciation and allow the economy to adjust.

Bank of Israel Governor Amir Yaron said last month the bank would continue to act in the foreign exchange market "at its discretion and taking economic activity into account".

Amid a global market sell-off, the shekel has weakened in the last two weeks and is down 3% so far this year at 3.2 per dollar - back to its level from the end of 2020. It is also down 4% against the euro so far in 2022.

The central bank also indicated that its 85 billion shekel ($26.6 billion) quantitative easing programme, launched at the outset of the pandemic, ended in late 2021 as planned, with its final purchase of Israeli government bonds made in December.

It also bought 3.5 billion shekels worth of corporate bonds in 2020.