Bank of Israel sells $30 billion in forex to stabilize shekel during Gaza war
The Bank of Israel has announced its first-ever sale of foreign currency, up to $30 billion, in an effort to stabilize the shekel amid the ongoing war with Palestinian militants in Gaza. The shekel has already weakened by 10% this year due to political turmoil, and the announcement caused it to fall 2.8% against the dollar. The central bank aims to decrease market uncertainty and ensure regular market activity. It also plans to provide liquidity through swap mechanisms. Despite expectations of a weaker shekel in the medium term, economists do not anticipate sustained bouts of shekel weakness. Israeli stock and bond prices rebounded after a 7% slide, while government bond prices were mixed. Israel's forex reserves, amounting to over $200 billion, provide a strong position for the country.
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