The Bank of Israel may exceed the $110 billion ceiling for foreign currency reserves in its attempts to prevent the shekel from appreciating against foreign currencies, Bank of Israel marketing department head Andrew Abir said today.
Abir's remarks follow intensive purchases of foreign currency by the Bank of Israel in recent days in response to speculative purchases of shekels, mainly by foreign banks and investors. The Bank of Israel bought hundreds of millions more dollars today, following purchases of $1 billion in the past few days.
The foreign currency reserves managed by the Bank of Israel exceeded $100 billion in January, and are rapidly nearing the $110 billion ceiling set by the Monetary Committee.
Referring to this landmark, Abir said, "Two years ago, we published the level for the reserves we believe we will need in a crisis. I'm confident that the market realizes that this published figure does not restrict intervention in the foreign currency market. The Governor of the Bank of Israel did not tell the markets department, 'You must not exceed $110 billion'."
The ceiling was raised from $90 billion to its current level two years ago.
Published by Globes [online], Israel Business News - www.globes-online.com - on March 2, 2017
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