Bank of Israel: Foreign currency surplus hits US$47.5B

The Bank of Israel has been buying US dollars in an attempt to stabilize the ever-fluctuating currency and to increase its foreign currency balance
 
In a statement issued last week by The Bank of Israel it noted that Israel's foreign currency surplus was approaching the US$50 billion mark. The Bank of Israel said that its US currency balance for the month of May stood at a record US$47.550 billion – a US$2.474 billion rise from April 09.
 
The Bank of Israel has been buying US dollars in an attempt to stabilize the ever-fluctuating currency and to increase its foreign currency balance.
 
The statement also noted that the Bank intended to continue its foreign currency purchase in order to prevent dollar rates from slipping further, which may prove detrimental to Israeli export industries.
 
In a recent interview Bank of Israel Governor Stanley Fischer said that the Israeli market "had a tradition under which the central bank stayed out of currency market since 1997. We started to intervene in mid 2008, because we weren't about to let the market slip into a recession with the shekel being so strong against the dollar – that would have had a very negative effect on the market”.
 
The Bank, he added, will continue buying USD for as long as the recession lasts.