Bank of Israel: FX intervention forced shekel depreciation
A Bank of Israel paper examines the effect of foreign currency interventions by the Bank of Israel on the shekel-dollar nominal exchange rate and finds ad-hoc currency purchases in 2008 and 2009 helped devalue the currency.
Avihay Sorezcky, the author, uses an unrestricted vector auto regression model to measure dynamic and static forecasts of the actual exchange rate from March 2008 when the Bank of Israel started buying foreign currency.
The results show that the changes in the Bank of Israel
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