Bank of Israel Halts Dollar Purchases in July After Two Months of Intervention

The Bank of Israel did not intervene in the foreign exchange market during July, following two consecutive months of dollar purchases. In June, the central bank bought approximately one billion dollars, and in May, it acquired around 800 million dollars. The Bank of Israel can intervene in the foreign exchange market in two ways: monetary intervention aimed at influencing the exchange rate, or targeted intervention to ensure the proper functioning of the market. Previous interventions by the bank were of the second type, responding to detected market manipulation or irregular activity, and were not intended to affect the exchange rate. It appears that no events in July justified such targeted intervention. Currently, the dollar is trading at about 3.01 shekels, a rate consistent throughout July. This follows a significant strengthening of the shekel against the US dollar in May and June, when the rate fell below 2.8 shekels per dollar.