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October 2, 2013 3:33 pm

Bank of Israel to Buy U.S. Dollars Worth $3.5 Billion in 2014 to Offset Natural Gas Earnings

avatar by Joshua Levitt

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Bank of Israel, Jerusalem. Photo: Ester Inbar.

The Bank of Israel on Wednesday said that it would buy U.S. dollars worth $3.5 billion in 2014 to help balance the effect of huge natural gas sales on the nation’s foreign currency reserves, according to Israel’s Globes business daily.

In May, the Bank of Israel estimated the effect of natural gas production on the balance of payments at $2 billion in 2013 and that it would purchase $2.1 billion by the end of this year. In a subsequent report, the Bank of Israel said that its foreign currency purchases under this program would likely last until 2018, when the Israeli Sovereign Wealth Fund from the natural gas income would begin operating.

Dr. Karnit Flug has been Acting Governor of the Bank of Israel since Professor Stanley Fischer stepped down at end-June.

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