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Bank of Israel steps in to stop dollar slump
Governor Stanley Fischer makes unlikely move as Bank of Israel intervenes in trading for first time in 10 years in an attempt to stop dollar rates from sliding further
Adrian Filut
The Bank of Israel continued to closely monitor dollar rates Friday, buying more of the American currency to insure its stability and drive up its trading rates.
In an unlikely move, unseen for the past decade, Bank of Israel Governor Stanley Fischer ordered the purchase of some $300 million, in an attempt to stop the dollar – which fell 2% and ended Thursday's trading an the 11-year low of NIS 3.403 – from sliding further.
The Bank's efforts seem to help, as Friday saw dollar rates rise 1.85% and reach NIS 3.47. Euro rates recovered as well, adding 2% and reaching NIS 5.40.
Senior market analysts told the financial publication Calcalist that the stabilization noted in the currencies was the market's natural reaction to Fischer's move.
The Bank, reported Calcalist, intends on purchasing a similar amount of dollars Friday, using the short trading day as leverage to ensure dollar rate continue to recover.
Efforts aside, the dollar ended its trading week with a 5% lose. Dollar rates have decreased by 11.5% since the beginning of 2008 – more than its 2007 overall slump.
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