Bank of Israel Continues Dollar Purchases in June to Stabilize Currency Market

The Bank of Israel maintained its intervention in the foreign exchange market during June by purchasing just over one billion dollars. According to the bank's report released on Tuesday, these purchases were made selectively to ensure the continued orderly functioning of the markets. The intervention involves buying dollars in exchange for shekels to mitigate the negative effects of the shekel's appreciation on economic activity. This operation is conducted by the Markets Division following policies set by the Monetary Committee.

In May, the bank intervened by buying approximately 800 million dollars after detecting disruptions in market activity indicators. The intervention helped restore normal market functioning. The Bank of Israel can intervene under two main frameworks: one related to monetary policy aimed at controlling inflation and exchange rate expectations, and another focused on maintaining proper market operations, which was the reason for the recent interventions.

Market analysts had anticipated the bank's continued dollar purchases in June, especially as the shekel's exchange rate shifted from a sharp appreciation to trading around 3 shekels per dollar. The bank's actions aim to balance currency fluctuations and support economic stability amid changing exchange rate dynamics.