The decline was due to government debt repayments abroad, and decline in banks foreign currency deposits with Bank of Israel.
Israel’s foreign currency reserves declined by $88 million in February, and at the close of the month totaled $21.54 billion. The January decline in the reserves followed a $2.36 billion increase in the period November ’97 to January ’98, an increase of 12.3%.
Today, Bank of Israel revealed that last month’s modest decline was mainly due to government debt repayments abroad. There was also a decline in commercial banks deposits of foreign currency with the Bank of Israel. It should be noted that the Bank of Israel did not intervene in foreign currency dealing in recent month.
Even so, foreign currency reserves have increased by $1.46 billion since the beginning of ’98, an increase of 7.3%. Net of swap tenders (shekel-dollar exchange arrangement with the banks), the reserves are $1.7 billion higher, and total more than $23 billion. The reserves have risen $10 billion since the beginning of ’97, a rise of 88%. Since the beginning of ’95 the reserves have increased by $15 billion, 3.2 fold.
Published by Israel's Business Arena March 1, 1998