The Bank of Israel announced on Monday the termination of its foreign currency purchases program aimed at offsetting the effect of natural gas production on the exchange rate.

In 2013, the bank purchased 2.1 billion U.S. dollars in this program and in 2016 and 2017, it has purchased 1.5 billion U.S. dollars each year.

The Bank of Israel began to intervene in the foreign currency market as of August 2009 and purchased U.S. dollars in the market in order to moderate the appreciation of the new shekel to prevent a decrease in the exporters' profits.

Earlier this year, the bank published a study, according to which all purchases made by the bank weakened the new shekel by two to three percent, while in more intensive periods the effect reached four to six percent.

In response to the bank's announcement, the U.S. dollar recorded a sharp downward trend, moving from an increase of 0.2 percent to a decrease of 0.36 percent against the Israeli new shekel.