About the Market Operations Department

​The Market Operations Department has three main functions: implementing monetary policy; holding and managing the foreign exchange reserves of the State; supporting the orderly activity of foreign exchange trading in Israel and publishing the representative exchange rate.

Implementing monetary policy
The Bank of Israel has several tools which it uses so that the rate of interest in the economy will accord with that set by the Monetary Committee headed by the Governor. The rate of interest achieved via those tools directly affects banks' rates of interest vis-à-vis the public.
Tools for implementing monetary policy

Holding and managing the country's foreign exchange reserves
The Bank of Israel holds the foreign exchange reserves to provide liquidity in foreign currency when it is needed, such as to finance the repayments of the country's debt, to pay for exceptional government expenditure on imports at times of emergency, to provide liquidity in a financial crisis, or to be sold as necessary in the course of conducting monetary policy.

Regulating foreign exchange trading and publishing representative exchange rates
The Bank of Israel's Market Operations Department monitors and analyzes current developments in the foreign exchange market, and carries out the Bank's exchange rate policy. Foreign exchange trading takes place primarily between banks and their customers both in Israel and abroad, and between the banks themselves. Every foreign exchange trading day, the Bank of Israel publishes the representative exchange rates of the shekel vis-à-vis foreign currencies. The representative rate is based on market prices around the time the rate is set.

For more information on the Market Operations Department