Annual Report of the Bank of Israel Currency Department for 2010

13.03.2011
 
Annual Report of the Bank of Israel Currency Department for 2010
 
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For the full report in Hebrew - Click here
 
Today the Bank of Israel published the Annual Report of the Currency Department for 2010 in Hebrew. The English version will be available in the next few weeks.
Banknotes and coins in circulation in Israel in 2010
The amount of currency in circulation reached about NIS 45 billion at the end of 2010, compared with about NIS 41.5 billion at the end of 2009, a 9 percent increase. The increase derived from the increase in Israel’s population and the expansion of economic activity in 2010. The rate of increase in 2010 was slower than the increases in 2009 and 2008, when the amount of currency grew by 21 percent and 19 percent respectively. The decline in the rate of increase may be ascribed to the increase in the interest rate in Israel which started at the same time as did renewed growth.
In 2010 banknotes constituted 97 percent (NIS 43.6 billion) of the total value of money in circulation, and coins, 3 percent (NIS 1.5 billion). The share of NIS 200 banknotes in the total amount increased again in 2010, by 20 percent, due to their broader distribution in cash dispensers. This increase accounts for most of the increase in the amount of banknotes in circulation in 2010, as the number of NIS 50 and NIS 100 banknotes declined.
More than half of the coins in circulation (53 percent) were 10-agorot coins, used mainly for change on urban public transport. As a result of the change in public transport fares in January 2010, there was greater need for 10-agorot coins to enable efficient payment of fares with a minimum of coins. The increase in 10-agoorot coins explains 64 percent of the total increase in coins. The 1-sheqel coin, much used in parking meters and vending machines, accounted for 21 percent of the number of coins in circulation. The number of 2-sheqel coins, which was first issued at the end of 2007, increased by 54 percent in 2009, and reached 2 percent of the number of coins in circulation. The number of 5-sheqel and 10-sheqel coins in circulation each constituted only 3 percent of the total number of coins.
In 2010 the rising trend in the number of possibilities for withdrawing cash continued, with the main increase taking place in the number of cash-dispensing machines owned by private companies that are operated by the businesses in which they are located. Other alternative possibilities were introduced, such as cash withdrawals in chain stores and petrol stations.
December 31, 2010 was the final date for exchanging banknotes of the First Series New Sheqel (which were in circulation in the years 1985–99) and the 5-agorot coin which was abolished and which ceased to be legal tender on January 1, 2008. These notes and coins are no longer legal tender in Israel, and cannot be exchanged for banknotes and coins in the current series, the Second New Sheqel Series. This reduced the amount of currency in circulation by NIS 221 million on December 31, 2010.
Activity of the Bank of Israel Currency Department in 2010
In 2010 the Bank of Israel continued to implement its new policy, introduced towards the end of 2009, regarding the operation of the cash system. The purposes of the new policy were to maintain a high quality of cash in circulation, reduce the costs of cash handling both to the Bank of Israel and to those whose businesses involve handling cash, and raise the level of service to the public. Since the new policy was introduced, eleven cash handling centers of the banking corporations and the Post Office have been established, and these are approved and supervised by the Bank of Israel. These centers, equipped with sophisticated cash counting machines which reject counterfeits, regulate surplus supply and demand of banknotes and coins between themselves and between them and their customers, and only withdraw from the Bank of Israel the balance of surplus demand in the economy; the policy requires them to deposit in the Bank of Israel worn and damaged currency. This policy has resulted in a significant improvement in cash handling.
In 2010 the Currency Department completed the upgrading of its cash counting and sorting system, and new advanced technology machines were put into use. This improved the work methods and enabled the Bank to provide more efficient service to its customers. In addition, a new system was introduced for packing coins returned to the banks or the public in rolls instead of in nylon bags as hitherto. This rationalized the packing process and reduced costs, storage space, and labor input.
In 2010 the Currency Department continued planning a new series for Israel's currency, and made a number of decisions. The planning incorporates many aspects, including the number of denominations, the security features and features to help the blind identify the different denominations, the shape and design of the banknotes, and the size of the different denominations. It is planned to introduce the new series into circulation within three years.
In its struggle against counterfeit currency, the anti-counterfeiting special forum consisting of representatives of the police, the banks, and the Association of Banks, as well as representatives of the Currency Department met several times during the year. The forum discusses and formulates means for preventing and identifying counterfeits and for dealing with them.
Recently many attempts have been made to use photocopies and replicas of banknotes in advertisements. The Bank of Israel would like to bring to the attention of the public and to advertisers that there are limitations and prohibitions relating to photocopying banknotes and publishing such photocopies or photographs, and these are described in detail in the Report.
From enquiries received in the Currency Department it is clear that there is growing public involvement and interest in matters related to currency. This is reflected in requests for information, reactions received when new coins or banknotes are issued, the number of suggestions and enquiries about the currency, and in the public's awareness of details in the design of notes and coins.
Address for public enquiries relating to currency: pniotz_ matbea@boi.org.il
The Currency Department provides a money-changing service (changing Israeli currency into larger or smaller denominations) at the cash desk in the Bank of Israel in Jerusalem. The public can also change spoiled currency at the cash desk, without charge.
The cash desk in the Bank of Israel in Jerusalem is open Sunday to Thursday, 08:00 to 13:00, Tel: 02-6552846/7