Bank of Israel to Buy $2.1 Billion, Cut Interest Rate to Stem Shekel Appreciation

Rise in shekel seen tied to natural-gas production from Tamar offshore field.

In a step that caught the markets by surprise, the Bank of Israel moved decisively Monday to stem the strengthening of the shekel, announcing a two-pronged program to buy $2.1 billion in foreign currency this year and reducing its base lending rate by a quarter of a percentage point to 1.5%.