Israel’s foreign exchange reserves at the end of December 2019 stood at a record $126.023 billion, up $3.64 billion from their level at the end of November 2019, the Bank of Israel reports. The reserves represent 32.8% of GDP.
These figures indicate the price being paid by the Bank of Israel to weaken the shekel, which is nevertheless trading at NIS 3.476/$ after gaining 7.8% against the dollar in 2019. The shekel is trading at NIS 3.876/€, after gaining 9.6% against the euro in 2019.
During December, the Bank of Israel made foreign exchange purchases totaling $2.266 billion. A revaluation increased the reserves by a further $1.316 billion and government transfers from abroad totaled $69 million. This increase was very slightly offset by private sector transfers of $11 million.
After Prof. Amir Yaron took office as Governor of the Bank of Israel in December 2018, the large foreign exchange purchases made routinely by his predecessors Dr. Karnit Flug and Prof. Stanley Fischer in order to help Israeli exporters by weakening the shekel were halted.
But in the final quarter of 2019, Yaron clearly had a change of heart and purchased nearly $4 billion in foreign currency, more than half of that sum in December. During 2019, Israel's foreign currency reserves rose nearly 10% from $115.279 billion to $126.023 billion.
Published by Globes, Israel business news - en.globes.co.il - on January 7, 2020
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