The central bank of Israel intervened in the foreign currency markets to buy dollars on Thursday, March 13.

This is the first time that the Bank of Israel made such a move for more than a decade. Analysts were surprised by Governor Stanley Fischer’s decision after his comments that the move was very unlikely and only a market failure would make them do it. Traders were also caught off-guard. It even surprised the Finance Ministry of Israel just as well.

The central bank, however, has refused to reveal exactly how much it has actually purchased. Although it is impossible to determine precisely how much the bank bought, some estimates suggest that it was around US$100 million.

The central bank released an extremely brief statement citing the extraordinary behavior of the shekel exchange rate as the reason for this unexpected action.

On March 13, the shekel hit its lowest against the US dollar (NIS 3.35) in 1997, the same year the Bank of Israel last intervened in the foreign currency market.

The bank also refused to rule in or rule out possible interventions in foreign currency in the future.