Following a surprise attack on Israel by Hamas militants, the country’s central bank announced an unprecedented 45 billion shekel support program, the bulk of which will be spent on foreign exchange interventions to maintain the shekel’s exchange rate. This was reported by Bloomberg.
The Bank of Israel reportedly plans to provide $15 billion in liquidity to local banks through swap transactions and also plans to sell up to $30 billion in foreign currency in an attempt to smooth out shekel volatility and provide needed liquidity.
This decision is the regulator’s first intervention in the foreign exchange market in two years and includes the sale of dollars for the first time. This follows the worst attack on Israel in decades.
Following the opening of trading, the shekel fell almost 2% against the dollar but later regained some of its losses. TA-35 index showed its biggest decline in the last three years on Monday. Experts state that volatility in the market will continue in the short term, but they expect it to be manageable. The Bank of Israel program is necessary to maintain stability.
Shekel exchange rate recently updated Record anti-dollar.
Previous analysts saidThat the Palestinian-Israeli conflict could increase the prices of defense assets.