Cash use in Israel jumped 17.5% in 2020

The amount of cash in circulation in the Israeli economy jumped by 17.5% or NIS 18.6 billion in 2020 to NIS 105 billion, the Bank of Israel reports. This compares with a rise of just 1.5% in 2019.

This exceptional rise means that the average household has NIS 7,000 in cash in their wallet, which is unlikely. The Bank of Israel says that the rise in cash use reflects the need of the public to feel more financially secure in an era of uncertainty. The biggest jump in cash use came at the very start of the pandemic, just before the first lockdown was imposed.

However, the rise in cash use has continued into 2021 with NIS 6.2 billion more in circulation in January and February.

The amount of cash in the economy is one of the indicators of the extent of the black economy. One explanation is that businesses were taking cash to lower their revenue to earn government grants for Covid compensation, while people ostensibly on unpaid leave were actually doing jobs for cash.

Published by Globes, Israel business news - en.globes.co.il - on April 22, 2021