The Bank of Israel's profit for 2018: NIS 5.3 billion

The Bank of Israel published its financial statements for 2018. After years of appreciation in the shekel, the shekel depreciated by 8.1% against the dollar in 2018. The Bank of Israel manages foreign reserves of some $ 115 billion, and the strengthening of the dollar created profits on paper of NIS 24 billion.
The interest-rate differential in favor of the dollar and the weakening of the shekel, against which the Bank of Israel received a profit of NIS 5.3 billion in 2018, compared with a loss of some 0.8 billion in 2017. The interest spread between the Israeli government bonds and US government bonds in short terms Approached in 2018 to 200 basis points (2 percent) even though the central bank raised the interest rate in November to 0.25 percent.
The reports show that the main components of the profit are the Bank's income from interest on the investment of the foreign exchange reserves, which amounted to NIS 5.6 billion this year, and non-interest income from securities and net derivative financial instruments, which stood at NIS 0.9 billion this year. The main expenditure items that affected a decrease in profit were expenditures on printing money and coins, and general and administrative expenses, which together amounted to NIS 0.9 billion.
The bank's statement noted that the bank's balance sheet rose by NIS 38 billion (9 percent of the balance sheet) to NIS 440 billion. The increase in the assets side was mainly attributed to an increase in the foreign exchange reserves, which resulted mainly from positive exchange rate differentials of the reserves, mainly as a result of depreciation of the shekel against the dollar and foreign currency purchases made by the Bank this year. Liabilities in the balance sheet increased by NIS 13.6 billion, as a result of several factors: the increase in the net monetary absorption tools - makam and time deposits - of NIS 9.9 billion, to NIS 296 billion. Part of the absorption is derived from the need to sterilize the said foreign currency purchases. Another reason is an increase of about NIS 4.9 billion in the monetary base, against the background of GDP growth.