The Bank of Israel is buying dollars again in order to keep the strong Israeli shekel from blitzing out the ability of domestic business owners to conduct their daily affairs in the international marketplace.
Last Friday the Israeli currency reached a seven-year high against the U.S. dollar (NIS 3.4), making it difficult for those who trade in American currency to conduct business.
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On Tuesday, the Bank of Israel tried to slow things down a bit by purchasing more than $400 million – not the first time Israel’s central bank has employed this strategy. The dollar appreciated by 0.7 percent after the purchase and was trading at NIS 3.43 by the end of the day.
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