The Bank of Israel stepped into the foreign‑exchange market in May, buying $801 million of dollars as the shekel surged to a 30‑year high. Officials said the move aimed to keep markets orderly and support export competitiveness. Reserves rose by $2.9 billion that month, reflecting the scale of the intervention. The purchase also helped temper speculative spikes that threatened short‑term volatility.

The shekel appreciated roughly 4.6% in May, outpacing all major currencies in Bloomberg’s basket and closing at 2.81 per dollar. Exporters, especially high‑tech firms, complained that a strong shekel inflates local labor costs and forces plant relocations. Such pressure threatens Israel’s goal of reaching $85 billion in high‑tech exports by 2025. The Manufacturers Association of Israel warned the central bank was ignoring the sector’s pain.

Governor Amir Yaron signaled possible faster rate cuts after the central bank trimmed the policy rate to 3.75% on May 25, a move that nudged the shekel lower from June 2 onward. The intervention marks the first dollar purchase since 2021, following earlier sales during the post‑October‑2023 conflict. Export‑heavy firms now watch monetary policy closely as a tool to rebalance currency pressure. Analysts see limited upside for the shekel.