The Bank of Israel has announced that it is intervening on the foreign exchange market to mitigate the volatility of the Israeli currency, the shekel, which fell sharply after the surprise weekend offensive by the Palestinian Islamist movement Hamas.
At around 09:45 GMT on Monday, the shekel was down 2.09% against the dollar, at 3.92 shekels to the dollar.
“The Bank of Israel announces a program to sell up to $30 billion [€28.5 billion] in foreign exchange,” the central bank said in a press release on Monday. “The Bank will operate in the market during the coming period in order to moderate volatility in the shekel exchange rate and to provide the necessary liquidity for the continued proper functioning of the markets.”
It also said that it is setting up a derivatives exchange mechanism for up to $15 billion dollars, again to provide liquidity to the market, and that it is ready to act with “the tools available to it as necessary”.
Israel has declared a “state of war” following Hamas’s surprise attack on Saturday.
Some 1,100 people have been killed in Israel and Gaza following the large-scale assault and the death toll expected to rise as many people are critically wounded.
Oil prices have also surged since Hamas’s initial attack, as stakeholders fear the disruption of oil supplies from the Middle East region.