Israeli institutions sold FX in Q1 as global markets pushed higher

ISRAEL - In Brief 09 May 2024 by Jonathan Katz
In Q1, Israeli institutional investors sold net $5.3 billion, following purchases of a similar volume in Q4. Sales in the first quarter derived mainly from sharp increases in global capital markets and not really due to optimism about the geopolitical environment. As of February, the rate of exposure to foreign currency was 22.5 percent, compared with 22.2 percent in December. In Q1, nonresidents purchased $0.6 billion (after sales of $4.4 billion in Q4) and the Israeli business sector purchased $2.0 billion after purchases of $5.3 billion in the previous quarter. It should be noted that the real sector actually purchased foreign currency in the past six months despite an improvement in the current account surplus (net exports). The Bank of Israel did not intervene at all in the foreign exchange market in the first quarter. The shekel's exchange rate will continue to be sensitive to expectations regarding the geopolitical environment and the direction of markets abroad.

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