The Governor presented the state of the economy and major current and future economic developments. Among other things, the Governor referred in his remarks to the Bank of Israel’s $30 billion foreign exchange purchase program for 2021, further to yesterday’s press release in which the Bank reported it had purchased $6.8 billion in January.
In a conversation with the Chairman of Bar-Ilan University’s Council of Trustees, Shlomo Zohar, CPA, the Governor said, “Thirty billion dollars is a very considerable amount. We are committed to purchasing this amount. To understand the magnitude, consider what would happen in the foreign exchange market if the surplus in the current account would decrease by such an amount.
Clearly, if it will be relevant, and given the economic and market conditions at the time, we will be able to increase the scope of the foreign exchange purchase program, just like when we announced, previously, the expansion of the government-bond quantitative easing plan.”
In addition, the Governor presented findings that indicated that the third lockdown was not as tight as the previous lockdowns, based on the Bank’s analysis of credit card purchases, which are obtained from Shva.
It appears that in the first two lockdowns, it can be seen that a marked increase in credit-card purchases only began at the end of the lockdown, while in the third lockdown such an increase could already be seen in the middle of the lockdown.
In view of this development, alongside the impressive pace of vaccinations in Israel at the same time as the high morbidity, the Governor said, “There is room to examine and make use of the green passport – an authorization that will be issued to people who have been vaccinated, after a week following the second vaccination – as a tool that will assist in opening trade and carrying out economic activity in a controlled manner”.