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The Bank of Israel bought dollars again last Friday, another $200-300 million worth. The dollar rose 2.1% after the purchases, to NIS 3.474. The euro also rose on Friday by 2.2% to reach NIS 5.416.

Last Thursday, when the central bank intervened in foreign currency trading for the first time since 1997, the dollar had reached a low of NIS 3.35, an 11-year low.

Tomorrow the Bank of Israel will carefully study the effects of its intervention on foreign exchange markets, and decide whether to continue buying up dollars in addition to the $500-600 million it has already purchased.

International foreign exchange markets are closed today.

But while the dollar may have risen in Israel on Friday, it still took a beating around the world. For the first time in history, the greenback was worth less than the Swiss franc.

And the whole world is also waiting for the Fed's decision on Tuesday regarding an interest rate cut. Forecasts are for a large cut, 0.5% to 0.75%, but there are those betting on even 1%.

Back in Israel, Stanley Fischer, the governor of the central bank, Finance Minister Roni Bar-On, and all senior officials from both institutions, are refusing to comment on the bank's intervention. Even former officials are refusing to talk.

Israeli commercial banks at least had a good word to say, praising Fischer for conducting the purchases through their banks and not foreign investment houses and banks, as in the past.

The Bank of Israel had been keeping a close eye on developments in both Israeli and global markets. It seemed to Fischer last week that the dollar exchange rate had lost touch with reality and was heading for a crash. After consulting various officials in the bank and elsewhere, he decided to intervene Thursday afternoon. He called Prime Minister Ehud Olmert and Finance Minister Roni Bar-On to inform them of his decision just before making the purchases. Neither Olmert or Bar-On were consulted, and neither were any of their ministry officials. The two were shocked by the move, but both gave their approval for Fischer to proceed.

It can be said that Fischer has put his reputation on the line. It is too early to say if the intervention has succeeded, but it is clear that what forced Fischer's hand was the rapid, 3% fall of the dollar on Thursday to NIS 3.36.

The central bank has detailed information about all foreign exchange transactions. It does not look to them, as many have claimed, that currency speculators are making a killing on the shekel. Instead, it seems that Israelis, investors and companies, are simply repatriating some of their overseas investments after having lost a lot of money abroad in recent months.