Bank of Israel's Foreign Currency Reserves Hit Record High Amid Global Market Revaluation: Reserves Climb to $220.37 Billion

At the end of September, the portfolio of foreign currency balances at the Bank of Israel continued to increase in value to a record level of $220.37 billion. The increase in value is due to a "revaluation of the portfolio", apparently due to the increase in the world's leading stock indices this month.
This is the highest level at which the foreign exchange reserves of the Israeli central bank have been since forever. The foreign exchange reserves at the end of August stood at approximately 217.4 billion dollars, and at the end of July at approximately 213.6 billion dollars. In July 2024, the record of foreign exchange balances recorded in December 2021 was broken for the first time at the level of approximately 213 billion dollars.
The high level of reserves is equivalent to 42.8% of the domestic product of the Israeli economy. This is a fairly high level, but lower than the one recorded during 2021.
Israeli foreign exchange reserves are of an unusual amount in international comparison, but now during the war, they constitute a kind of security cushion for the Israeli currency.
For example, in the latest S&P rating downgrade report, the company's economists wrote that "after the decrease in foreign exchange balances in October 2023, the gross foreign exchange balances of the Bank of Israel crossed the level that existed before the war and reached at the end of August a total of approx. 217 billion dollars (about 42% of the GDP), the foreign exchange balances constitute a significant security cushion, and in the company's opinion considering that they cover 1.6 times the external debt of the entire Israeli economy (public sector, banks, non-banking companies) they allow the State of Israel room for maneuver in policy ".
Normally, the mere existence of the foreign exchange reserves provides resilience to the Israeli currency, but during October 2023, the Bank of Israel intervened in the trade and sold foreign exchange to the extent of approximately 8.2 billion dollars. This intervention also continued during November 2023, in which the bank sold foreign currency to the extent of another 300 million dollars.
These sales were during the period when the bank announced on the ninth of October 2023 that it would sell foreign exchange "in the amount of up to 30 billion dollars in order to moderate the fluctuations in the shekel exchange rate and provide the liquidity required for the continuation of the regular activity of the markets".
Even today, a year after the announcement, the Bank of Israel's plan is still valid, and the Bank of Israel's announcement that it is willing to intervene in the foreign exchange market probably affects the Israeli exchange rate.