Israel’s Foreign Exchange Reserves Swell

Photo Credit: Noam Revkin / Flash 90

Israel’s foreign exchange reserves at the end of December 2019 stood at a record $126 billion, an increase of $3.64 billion from their level at the end of November, a report by the Bank of Israel said.

The reserves represent 32.8% of the GDP.

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The increase was the result of foreign exchange purchases by the Bank of Israel totaling $2,266 billion to help Israeli exporters by weakening the shekel, a revaluation that increased the reserves by approximately $1,316 billion and government transfers from abroad totaling approximately $69 million.

In contrast, the increase was partly offset by private sector transfers of approximately $11 million.

The massive purchases of foreign currency were ineffective in helping the shekel-dollar exchange rate as the shekel gained 7.8% against the dollar in 2019.

Israel’s foreign currency reserves rose nearly 10% from $115.279 billion to $126.023 billion in 2019.