The Bank of Israel published its review of Israel’s foreign exchange market in the fourth quarter of 2024, reporting that the shekel appreciated and that shekel-dollar exchange rate volatility eased. Over the quarter, the shekel strengthened by about 1.7% against the US dollar and 8.6% against the euro, and rose 6.1% in nominal effective terms against Israel’s main trading partners’ currencies, even as the US dollar strengthened globally. Realised shekel/dollar volatility fell by 0.2 percentage points to an average 9.9%, and implied volatility in over-the-counter shekel/dollar options declined by 0.7 percentage points to about 10.2% at quarter end, contrasting with rising implied volatility in emerging markets and advanced economies. Estimated segment flows show institutional investors and nonresidents sold USD 4.9bn and USD 4.4bn of foreign currency respectively, while the business and financial sectors purchased USD 4.7bn and USD 1.2bn. Average daily trading volume vis-à-vis the domestic banking system edged up 0.6% to USD 13.2bn, driven by higher swap activity, while nonresidents’ share of total trading volume with domestic banks fell by about 2.3 percentage points to about 41.3%; in the broader spot and forward market excluding swaps and options, nonresidents accounted for about 84% of trading volume.
Bank of Israel 2025-03-20
Bank of Israel publishes fourth-quarter 2024 foreign exchange market data showing shekel appreciation and lower volatility
The Bank of Israel's review of the fourth quarter of 2024 highlights the shekel's appreciation against the US dollar and euro, with reduced shekel-dollar exchange rate volatility. Institutional investors and nonresidents sold significant amounts of foreign currency, while trading volumes with domestic banks increased slightly, driven by swap activity.