Israel's reserves of foreign currency totaled $77.4 billion at the end of June 2011, the Bank of Israel announced Thursday.

 

During June, the BOI purchased $425 million in foreign currency; the rest of the reserves increase was due to government transfers from abroad; a currency revaluation; and private sector transactions.

 

In May 2011, the BOI purchased $200 million in foreign currency – after buying $1.4 billion in April 2011.

 

At the beginning of May, BOI Governor Stanley Fischer told the Wall Street Journal that he foresaw strong economic growth for Israel for Q1 2011 and hoped for minimal currency intervention.

 

Fischer noted that the BOI had revised its Q1 growth estimates upward from 3.8% to 4.5%, and Fischer said even faster growth in the quarter wouldn't come as a surprise.

 

Discussing foreign exchange rates, Fischer said he was prepared for more currency intervention if the shekel's value was not deemed "appropriate" but hoped that the need for such policy would be minimal.

 

The BOI head, pointing to a recent series of hikes in the country's interest rate and the shekel's continued rise, admitted that the central bank was willing to accept a stronger shekel.

 

Over the past year, the shekel has gained against the dollar despite Fischer's repeated interventions, which have raised the BOI's foreign currency reserves to new record levels. The bank is seeking to cool Israel's spiraling housing market and in addition to taking steps to weaken the shekel has introduced a series of mortgage reforms.