(Bloomberg) -- Israel’s foreign reserves fell by more than $7 billion in October as the central bank sought to defend the shekel following the start of the country’s war with Hamas.
Reserves dropped by $7.3 billion, or 3.7%, to $191.2 billion, according to the central bank. They are now at their lowest level in a year, though still way up on the average of the last decade.
The Bank of Israel announced a $45 billion support package soon after the conflict erupted on Oct. 7. The central bank pledged to sell as much as $30 billion from its foreign-currency reserves and to provide as much as $15 billion via swaps.
The shekel still slumped last month to weakest level since 2012 and the cost of hedging against further losses soared. Israeli stocks and bonds also fell heavily as traders feared the war would escalate to become a regional conflict.
In the past 10 days, Israeli assets, including the shekel, have gained amid a global relief rally and some signs the fighting will largely be contained to Gaza.
The shekel has now recouped almost all its losses since Oct. 7. It’s rose 0.9% to 3.85 per dollar as of 1:55 p.m. in Tel Aviv, extending its rise since late October to 6%.
The central bank said the fall in reserves was mainly down to foreign-currency sales of $8.2 billion.
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