When the Bank of Israel finishes beefing up Israel's foreign currency reserves by $10 billion, it will drop intervening in the forex market, a top central bank official said yesterday.
Zvi Eckstein, deputy governor of the Bank of Israel, said that the Bank of Israel's actions - first buying $25 million on each business day, then $100 million - had significantly slowed the appreciation of the shekel. Its moves could be considered successful, Eckstein said.
The central bank stepped up its pace after realizing that its plan hadn't moved the market, and the shekel was continuing to appreciate against the dollar, to the vocal dismay of exporters.
On March 20, Governor Stanley Fischer announced a plan to increase Israel's foreign currency reserves by $10 billion, and surmised that it would take about two years. At this pace it will only take two months for the Bank of Israel to buy that amount.
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