Bank of Israel Recorded a loss of NIS 35.4 billion due to a significant appreciation of the shekel against the euro and the dollar last year, according to reports published today by the Bank for 2021. Revenues fromForeign exchange reserves Without the exchange rate differences, they amounted to about NIS 16 billion. Most were due to gains due to an increase in the value of the shares, some of which were offset by bond revaluation losses as a result of the rise in yields.
The Bank of Israel writes that due to the increase in the Bank’s foreign currency reserves, the vast majority of exchange rate differential expenses are not realized, and therefore a change in the value of the shekel against the currencies in the reserve portfolio may offset their effect.
The Bank of Israel’s equity deficit deepened to NIS 63.5 billion, compared with NIS 43 billion in 2020, and bottom line, the Bank of Israel recorded a “on paper” loss of NIS 20 billion in 2021, compared with a loss of NIS 4.5 billion in 2020.
The Bank of Israel’s loss was due to the tools it used in the markets – such as foreign exchange purchases, the purchase of local government bonds, the provision of loans, in order to deal with the consequences of the economic crisis as a result of the corona plague. If the bank had made a profit and had invested positive equity, then the profits would have been transferred by law to the state budget, and on the other hand the loss and deficit have no meaning at all.
The scope of the Bank’s balance sheet increased in 2021 as a result of the operation of special tools in the markets by NIS 369.1 billion – a jump of 83% compared to 2020. The increase in the balance sheet was mainly affected by foreign currency purchases. Foreign exchange reserves increased by NIS 105 billion last year, to a level of NIS 662 billion, which is about $ 213 billion.
“The Bank’s activity for the purpose of achieving its goals and fulfilling its functions is not intended to carry profits, but to carry economic and economic benefits,” according to the Bank of Israel.