The Governor, Prof. Yaron: "Part of the Foreclosure - the Result of Short-Term Financial Factors"

• Dollars, illustration

The Governor of the Bank of Israel, Professor Amir Yaron, hints that speculative activity has contributed to the weakening of the dollar. He said, "Based on individual data that the Bank of Israel collects, it can be learned that some of the upswing was the result of short-term financial factors that could hurt economic activity and return inflation to target."

The Governor further emphasized in his remarks that "The Bank of Israel prepares to prevent an unusual appreciation of the shekel through the acquisition of foreign currency as needed, especially as it is estimated that the appreciation will be the result of factors of a financial nature. Macroeconomic. "

Abnormal strengthening

Prof. Yaron refuses to answer the question of "Bloomberg", until when the Bank of Israel will continue to buy dollars and if there is a limit to the level of foreign exchange reserves. He said that since the interest rate decision at the end of November, the Bank of Israel has operated on a relatively large scale in the foreign currency market.

During 2019 the strengthening of the shekel was exceptional in relation to other currencies. In December, the Bank of Israel purchased $ 2.27 billion, following large-scale acquisitions in the previous two months as well. Despite recent dollar purchases, the dollar has fallen to a low of NIS 3,466, completing a 1% decline over the past three months, and an overall decrease of 8% during 2019.

The euro also fell after the interest rate decision fell back to NIS 3,847, completing a 0.5% decline from the beginning of January, following a 10% decline during 2019.