JERUSALEM, March 30 The Bank of Israel said on
Sunday it planned to increase to 8 percent its equity investment
in the country's foreign currency reserves in 2014, while
starting investment in corporate bonds as part of a plan to
allow for higher risk.
The central bank in 2013 increased its equity allocation to
6 percent from 3 percent and was expanded to Germany, France and
Israel's foreign exchange reserves ended 2013 at $81.8
billion, a rise of $6 billion from 2012.
Some $3.2 billion of the purchases last year were within the
framework of the Bank of Israel's intervention "intended to
moderate exchange rate volatility which is not in line with
fundamental economic conditions in Israel," it said.
Another $2.1 billion were purchased as part of a plan that
began in May 2013 to moderate the effect of natural gas
production on the exchange rate.
The central bank noted that it changed its risk profile to
allow for absorbing more loss without negatively impacting the
achievement of the goals for which the reserves are held.
"The change in the risk profile was made possible by the
increase in the level of the reserves and the integration of
foreign exchange purchases within the framework of the natural
gas program, which are characterised by a longer term investment
horizon," it said.
The central bank aims to buy another $3.5 billion in 2014 as
part of its natural gas offset programme.
Reserves reached a record $84 billion in
(Reporting by Steven Scheer)