The Bank of Israel has reported that it purchased $801 million in foreign currency in May. This followed the sharp strengthening of the shekel, which was making it difficult for exporters and technology companies.
Market sources had thought that the Bank of Israel had only made marginal purchases of foreign currencies in May and that it continued to buy foreign exchange more vigorously this month - in parallel with the change in direction in the exchange rate. After the shekel-dollar rate touched a low of NIS 2.799/$ at the end of May, it has jumped nearly 5% and now stands at NIS 2.94/$. This is probably also due to the sharp declines on Wall Street at the end of the week, which led institutional investors to rebalance exposure in portfolios, close hedging positions and buy dollars.
The Bank of Israel can intervene in the foreign exchange market in two ways - through monetary policy by cutting the interest rate and by purchasing foreign exchange reserves.
The Bank of Israel reported that Israel’s foreign exchange reserves at the end of May 2026 stood at a record $238.681 billion, up $2.953 billion from their level at the end of April.. The level of the reserves relative to GDP was 37.2%.
The increase was mainly the result of: a revaluation that increased the reserves by approximately $2.685 billion plus foreign exchange purchases by amounting to $801million "to maintain the orderly functioning of the markets." This increase was partly offset by the government’s foreign exchange activities totaling about $721 million.
Published by Globes, Israel business news - en.globes.co.il - on June 7, 2026.
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