(Bloomberg) -- The Bank of Israel bought $4.4 billion dollars in foreign currency during December, the most in one month since at least 2009, in a bid to slow the appreciation of the shekel.
Despite the outsized purchases, which brought total central bank intervention in 2020 to $21.2 billion, the shekel strengthened 7.5% last year against the dollar -- the sixth-most among a basket of 31 major currencies tracked by Bloomberg. Central bank Governor Amir Yaron said foreign-exchange purchases will continue as necessary this year.
Key Insights
- The fresh round of currency purchases brought Israel’s total reserves to a record $173.3 billion, or 43.3% of output, and Yaron has said the level of reserves won’t limit the current policy
- Israel’s currency is seen driven by factors including the current-account surplus and foreign investment in the tech sector
- Earlier this week, the shekel reached a 24-year high against the dollar, as the outlook for economic growth in 2021 rises on the back of Israel’s world-leading vaccination campaign
- Monetary policy officials have cautioned the strong currency could act as a drag on inflation and exports, but Yaron said this week that service exports have been notably good during the current crisis, and recently there has been a recovery in goods exports as well
Market Reaction
- The shekel was trading little changed Thursday afternoon in Tel Aviv, at about 3.18 per dollar
Get More
- For an explanation of the shekel’s strengthening trend, and why the Bank of Israel has had difficulty slowing its appreciation, check out this question-and-answer.
Últimas Noticias
Debanhi Escobar: they secured the motel where she was found lifeless in a cistern
Members of the Specialized Prosecutor's Office in Nuevo León secured the Nueva Castilla Motel as part of the investigations into the case
The oldest person in the world died at the age of 119
Kane Tanaka lived in Japan. She was born six months earlier than George Orwell, the same year that the Wright brothers first flew, and Marie Curie became the first woman to win a Nobel Prize
Macabre find in CDMX: they left a body bagged and tied in a taxi
The body was left in the back seats of the car. It was covered with black bags and tied with industrial tape
The eagles of America will face Manchester City in a duel of legends. Here are the details
The top Mexican football champion will play a match with Pep Guardiola's squad in the Lone Star Cup
Why is it good to bring dogs out to know the world when they are puppies
A so-called protection against the spread of diseases threatens the integral development of dogs
