The Central Bank of Israel raises its foreign exchange reserves to a record level above 198 billion dollars


© Reuters. Bank of Israel Governor Amir Yaron in a file photo from Reuters archive.

JERUSALEM (Reuters) – Israel’s Central Bank said on Monday it bought $2.99 ​​billion in foreign currency in May, helping raise its foreign exchange reserves to a record $198.35 billion.

The central bank added that reserves, which represent 48.3 percent of Israel’s gross domestic product, grew by $4.35 billion last month.

Last January, the Bank of Israel said it would buy $30 billion in foreign currency in 2021 to try to stem the rise in the value of the Israeli shekel, after buying $21 billion in 2020.

Since then, Bank of Israel Governor Amir Yaron has said purchases could exceed $30 billion this year. The bank bought about $22 billion in foreign currencies in the first five months of this year.

The shekel had recorded 3.11 against the dollar on January 14, the strongest level since April 1996. With the help of the intervention of the Central Bank, the shekel has declined since then to remain stable between 3.24 and 3.30.

Monetary policymakers cited reasons for the shekel’s strength, including the global weakness of the dollar, strong foreign investment inflows into Israel and optimism that a rapid vaccination campaign for Covid-19 vaccines will quickly lead to an economic recovery after three waves of closures.

(1 dollar = 3.2473 shekels)

(Prepared by Wagdy Al-Alfi for the Arabic Bulletin)

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