Increased investment in in risk assets such as equities and corporate bonds by the Bank of Israel resulted in returns of 3.03% in 2017, the Bank of Israel reported today. The investments were within the framework of the risk level approved by the Bank of Israel's Monetary Committee.
Bearing in mind that the foreign exchange reserves reached $113 billion at the end of 2017, having increased $14.5 billion over the year, the profit from the investment was around $3 billion. The Bank of Israel purchased $6.6 billion in foreign currency during 2017 and revalued its existing reserves upwards by $7.47 billion.
The 2017 returns were higher than those achieved in previous years. In 2016 the Bank of Israel achieved returns of 1.56% and in the years prior to that an average of 1.16%.
The main reason for the higher returns was that the Monetary Committee decided to slightly increase the portfolio’s risk level, and the percentage of risk assets in the reserves portfolio continued to grow: the share of investment in equities increased to 13.3%, from 10.0%, and the share of investment in corporate bonds increased to 6% percent, from 4.8%. For most of the year, the share of investment in corporate bonds was 7.5%, and it was reduced toward the very end of the year.
Published by Globes [online], Israel business news - www.globes-online.com - on March 13, 2018
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