The strengthening of the shekel against the US dollar recently, especially last month, caused many to wonder whether the Bank of Israel would intervene in the foreign currency market, as it has in the past, and buy dollars in order to prevent the shekel appreciating further. It turns out, however, somewhat surprisingly, that the central bank actually sold dollars last month, to the tune of $300 million, for the first time since the first months of the war.
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The Bank of Israel’s intervention was a specific and limited response to Israel’s surprise attack on Iran last month. “The sale took place on a Friday a few weeks ago, after Israel attacked Iran. After the shekel-dollar exchange rate jumped to NIS 3.7/$, the bank decided to intervene. There was very sharp movement on the market that day, and there was speculation over whether it was caused by the Bank of Israel or some other entity. In the morning, the exchange rate rose sharply, but within a few hours the market calmed down, following the intervention,” explains Yossi Frank, CEO of Energy Finance, and an expert on the foreign exchange market.
In fact, this was the first time that the central bank had sold dollars since the start of the Swords of Iron war in October 2023, when, a few days after the deadly incursion by Hamas, the bank announced a program for selling dollars totaling $30 billion, in order to prevent the shekel from depreciating. In the event, the bank sold only $8.5 billion, mainly in October.
Despite the sale, the Bank of Israel continues to hold a very high quantity of US dollars. At the end of June, the Bank of Israel’s foreign currency reserves totaled $228.2 billion, $4.6 billion more than at the end of May.
Published by Globes, Israel business news – en.globes.co.il – on July 8, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
