Photo Credit: Orel Cohen/Flash90

The Bank of Israel’s Monetary Committee announced Monday the end of its foreign exchange purchasing program meant to offset the effects of natural gas production on the exchange rate

In 2013, against the background of a sharp appreciation of the shekel, the Monetary Committee decided to begin a foreign exchange purchasing program that was intended to offset the effect of natural gas production on the exchange rate. The Committee said at the time that the program would be re-examined upon the establishment of a sovereign wealth fund (“the Fund for Israel’s Citizens”), which had been expected to begin operating during 2018 and is now expected to commence in 2019 and investing money overseas in 2020.

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Every year, the Bank of Israel announced in advance what amount of foreign exchange it would purchase during the year as part of this program. Since 2013, the BOI has purchased some $13 billion.

The BOI said it would continue to operate in the foreign exchange market “in cases of exchange rate fluctuations which are not in line with fundamental economic conditions, or when conditions in the foreign exchange market are disorderly.”

The shekel-dollar rate dropped by close to 0.5 percent following the news, to NIS 3.67.

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