Bank of Israel Intervenes Again, Buys Over $1 Billion in June to Stabilize Currency

After years of inactivity, the Bank of Israel has resumed its intervention in the foreign exchange market by purchasing U.S. dollars to influence the shekel's exchange rate. In June, marking the second consecutive month of intervention, the central bank bought more than $1 billion, following $801 million in purchases in May. This move aims to maintain orderly market operations amid regional geopolitical instability.

By the end of June 2026, Israel's foreign currency reserves totaled approximately $238.7 billion, a modest increase of $18 million compared to the end of May. The reserves now represent 37.2 percent of the country's gross domestic product. The growth in reserves is mainly attributed to government foreign currency operations amounting to about $625 million and the Bank of Israel's targeted purchases of $1.027 billion during June. However, this increase was partially offset by a $1.458 billion revaluation of foreign currency holdings.

The recent dollar purchases and the unstable geopolitical situation in the Middle East have contributed to the dollar's rise against the shekel, climbing from 2.80 to nearly 3 shekels in recent weeks. Bank of Israel Governor Professor Amir Yaron emphasized the interventions were conducted to ensure continued smooth market functioning.