The Bank of Israel published an update on Israel’s foreign exchange reserves, reporting that reserves rose by about USD 14.9 billion in 2025 to USD 229.5 billion and that the reserves portfolio delivered a 7.9 percent return against its currency benchmark. The release also notes that revised reserve management guidelines took effect at end-2025, tightening safety and liquidity constraints while moderately expanding the CVaR5% risk budget and the scope to invest in risk assets. The increase in reserves was driven by capital gains on equity holdings, interest income from bond holdings, and exchange rate differentials reflecting US dollar weakness against the benchmark currencies, partly offset by government withdrawals from its foreign currency account managed at the Bank of Israel. At end-2025, the reserves were allocated 65 percent to government and other bonds, 25 percent to equities and 10 percent to corporate bonds; overall volatility moderated, but tail risk increased as the equity weight rose. In shekel terms, the 2025 return was -2.5 percent due to a 9.6 percent strengthening of the shekel against the currency benchmark, while the three- and five-year shekel returns were positive at 4.7 percent and 2.9 percent.
Bank of Israel 2026-03-31
Bank of Israel reports 2025 foreign exchange reserves increased to USD 229.5bn and updates reserve management guidelines
The Bank of Israel reported that foreign exchange reserves rose by USD 14.9 billion in 2025 to USD 229.5 billion, with the reserves portfolio delivering a 7.9 percent return against its currency benchmark but a -2.5 percent return in shekel terms due to a 9.6 percent shekel appreciation. Revised reserve management guidelines took effect at end-2025, tightening safety and liquidity constraints while moderately expanding the CVaR5% risk budget and scope to invest in risk assets, resulting in a portfolio allocated 65 percent to government bonds, 25 percent to equities and 10 percent to corporate bonds, with lower overall volatility but higher tail risk.