November 12, 2018 / 10:33 AM / a month ago

Bank of Israel ending FX purchases to offset natgas effect on shekel

JERUSALEM, Nov 12 (Reuters) - The Bank of Israel said on Monday that as of 2019 it was ending its programme of buying foreign currency aimed at offsetting the effects of natural gas production on the shekel exchange rate, citing the start of a sovereign wealth fund.

The central bank has bought $13 billion since it began the programme in 2013 when the Tamar gas field started production. The sovereign wealth fund is expected to begin operating in 2019 and start investing money abroad in 2020.

The monetary policy committee said the bank will “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.” (Reporting by Steven Scheer; Editing by Tova Cohen)

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