During October, the Bank of Israel sold $8.2 billion as part of its foreign exchange market intervention program, totaling $30 billion. This is according to the Bank of Israel's monthly foreign exchange reserves report published today. This is nearly a third of the amount defined by the Bank of Israel in order to moderate the depreciation of the shekel.
Since the beginning of the war, the dollar has surged against the shekel, peaking at almost 4.10 a week and a half ago, and has been on a downward trend ever since. The assumption that the war will be concentrated in the south together with the weakening of the dollar worldwide led to a sharp and rapid strengthening of the shekel, which today is already trading at pre-war levels—NIS 3.86, a strengthening of about half a percent. Against the euro, the shekel has strengthened by one percent since the morning and is currently trading around NIS 4.12.
IDF forces on the northern border. The shekel strengthens as the chances of war in Lebanon diminish, Photo: Reuters
During October, the Bank of Israel's foreign exchange trading interventions were frequent and aggressive, and it is reasonable to assume that sales in the coming periods will be more moderate if the shekel continues to stabilize or strengthen, against the background of the expectation that the chances of an escalation in the war to the northern arena have declined. The strengthening of the shekel that continued today is expected to moderate inflation pressures and return it more quickly to the Bank of Israel's target range.
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