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Bank of Israel Intervenes with $801 Million Purchase to Curb Shekel Strength

The targeted move signals the central bank is prepared to protect exporters even though weakening the currency could reduce import-driven disinflation.

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Bank of israel buys $801 million in rare market intervention to halt the shekel’s surge
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Overview

  • The Bank of Israel made a direct foreign-exchange purchase of $801 million in May to push back against an unusually strong shekel, its first such market intervention since 2022.
  • Official data show total FX reserves rose to a record $238.681 billion by the end of May, with about $2.685 billion of the monthly increase coming from revaluation gains rather than new inflows.
  • The central bank described the operation as a targeted step to keep markets orderly and said it was not trying to set a fixed exchange rate.
  • A stronger shekel has been squeezing exporters, especially tech firms that earn in dollars but pay local costs in shekels, and the intervention aims to relieve that pressure.
  • Using reserves to blunt appreciation would reduce the disinflationary effect of a strong currency and could complicate upcoming monetary policy choices if further weakening is needed.