Foreign currency (Illustration)
Photo: AP
Foreign currency surplus hits $47.5B
Bank of Israel continues buying US currency in effort to keep dollar rates stable. Overplus up by $2.47 billion from April, sets new record
Israel's foreign currency surplus is quickly nearing the $50 billion mark, as the Bank of Israel said recently that its US currency balance for the month of May stands at a record $47.550 billion – a 2.474 billion rise from April.
The Bank of Israel is buying US dollars in an attempt to stabilize the ever-fluctuating currency and to increase its foreign currency balance.
Plans
Bank of Israel pledges to buy $25 million each trading day over course of two years in attempt to stop freefall of US currency
The Bank intends to continue its foreign currency purchase in order to prevent dollar rates from slipping further, which may prove detrimental to Israeli exports.
Bank of Israel Governor Stanley Fischer said recently that the Israeli market "had a tradition under which the central bank stayed out of currency market since 1997. We started to intervene in mid 2008, because we weren't about to let the market slip into a recession with the shekel being so strong against the dollar – that would have had a very negative effect on the market."
The Bank, he added, will continue buying USD for as long as the recession lasts.
