The Bank of Israel is sending a message that it puts the welfare of the country first
It’s a luxury most of us don’t have, but the Bank of Israel (BOI) has accumulated that princely sum in its foreign reserves.
Until now, the bank kept some two-thirds of its foreign reserves in US dollars and one-third in Euros. Last week, the BOI announced that it would convert 2 percent of its dollar holdings (equivalent to $4 billion) to Chinese yuan, and 7 percent to Canadian and Australian dollars.
Countries normally hold foreign currency as a monetary tool and an emergency source of funding. In recent years, the BOI has purchased billions of dollars to stabilize the dollar-shekel exchange rate. In a national emergency, $206 billion could finance the entire state budget for a year and a half.
Financial media noted that the move makes sense at a time when the US has effectively “weaponized” the dollar, rendering it impossible for countries under sanctions, such as Russia and Iran, to conduct international trade in dollars.
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