For the first time in its history: srael crossed the $ 200 billion threshold in foreign exchange reserves
Posted on Jul 7, 2021 by Ifi Reporter
For the first time in its history, Israel crossed the $ 200 billion threshold in foreign exchange reserves held by the Bank of Israel. This is a new record since the establishment of the state in currency balances, which only in the previous decade still amounted to a few tens of billions of dollars.
The Bank of Israel reported today (Wednesday) that foreign exchange reserves totaled $ 200.175 billion at the end of June 2021, an increase of $ 1.825 billion compared to the end of the previous month. The balances constitute 48.8% of Israel's gross domestic product, beyond the rate required to secure an amount that will allow the country to operate even on difficult days.
The increase in balances is explained by foreign currency purchases by the Bank of Israel in the amount of $ 3.166 billion during June. Some of the purchases were made in order to absorb the surplus dollars entering the country as part of the natural gas production and some were made as part of the dollar purchases intended to block another decline in the dollar exchange rate in Israel against the shekel. Recently, the dollar exchange rate has been fairly stable at around NIS 3.25 to NIS 3.28 per dollar.
On the other hand, the increase in the amount of dollar balances in the Bank of Israel was partially offset by the following reasons: revaluation of foreign currency reserves in the amount of $ 1.057 billion, government transfers abroad in the amount of $ 155 million and private sector transfers in the amount of $ 129 million.
It should be noted that in the last year, from June 2020, foreign exchange reserves increased by a high amount of $ 53 billion. Since the beginning of 2021, the reserves have increased by $ 27 billion, with the Bank of Israel initially pledging $ 30 billion in 2021 as a whole, compared to $ 21 billion in 2020, but then the governor, Professor Amir Yaron, amended the central bank's statement. Israel will act in accordance with demand and will purchase even more than $ 30 billion this year.
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