The Bank of Israel building is seen in Jerusalem June 16, 2020. Photo: REUTERS/Ronen Zvulun.

The Bank of Israel said on Sunday it bought $6.832 billion of foreign currency in January, helping to weaken the shekel from a 24-year peak and taking forex reserves to a new record high of $179.5 billion.

Last month, the central bank said it would buy $30 billion of forex in 2021 to try and stem the shekel’s appreciation, after buying $21 billion in 2020.

The shekel hit 3.11 per dollar on Jan. 14, its strongest level since April 1996. With the help of the central bank’s intervention, it has eased back to a rate of 3.29, although the Bank of Israel believes that part of the shekel’s strength stems from a weak dollar globally.

Policymakers have also cited strong foreign investment flows into Israel, a wide current account surplus and optimism that a rapid COVID-19 vaccine rollout will quickly lead to an economic recovery after three lockdowns.

The central bank also said it bought 4.2 billion shekels ($1.3 billion) of Israeli government bonds last month to bring its total since March, when it began the program, to 50.4 billion shekels. Its balance of corporate bond purchases held steady at 3.5 billion shekels.

The Bank of Israel has said it would buy as much as 85 billion shekels of government bonds.

As part of a plan to encourage credit to small businesses, the bank said it loaned another 3.1 billion shekels to the banking system last month to bring its loan total during the COVID-19 pandemic to 22.7 billion shekels.

($1 = 3.2871 shekels)