The 2012 Currency Department Annual Review

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Circulation of Coins and Bankones, 2012

The value of currency in circulation at the end of 2012 reached about NIS 55 billion, compared with NIS 49 billion at the end of 2011.  This represents growth of 12 percent, which is higher than the growth rate for 2011 (9 percent).  Moderation in the GDP growth rate to 3.1 percent contributed to a slowdown in the growth rate of circulation.  In contrast, the decline in the Bank of Israel interest rate increased demand for money over interest-bearing deposits.  Some of the growth in circulation can also be attributed to inflation.  The inflation rate for 2102 was 1.6 percent.  Banknotes comprised 97 percent of the total circulation value during the reviewed year (NIS 53.1 billion), while coins comprised 3 percent (NIS 1.7 billion).

During 2012, the growth trend in the circulation of the NIS 200 banknote continued, with its value in circulation growing by 16 percent due to its increased distribution in automatic teller machines.  A survey conducted by the Bank of Israel’s Currency Department in 2012 concerning the public’s preference regarding the mix of banknotes in circulation showed that the public feels that the NIS 20 and NIS 50 banknotes are less available than it would prefer. The broad public feels this when paying in cash, and business owners feel it when providing change.


The 10 agorot coin makes up 60 percent of the coins in circulation, since it is used to provide change on urban public transit.  At the end of 2012, the number of 10 agorot coins grew by 9 percent compared to 2011, while the number of half-shekel coins declined by 1 percent.  This is because in January 2012, the price of urban public transit on “Dan” and “Egged” routes increased to NIS 6.60, leading to an increase in the number of 10 agorot coins and a decline in the number of half-shekel coins necessary for providing change.  The NIS 1 coin—a coin that is in high use in parking meters and vending machines—constituted 23 percent of the coins in circulation in 2012, while the NIS 2 coin, which entered circulation in 2007, reached 3 percent of the coins in circulation in 2012.  NIS 5 coins accounted for 4 percent of the coins in circulation, and NIS 10 coins accounted for 3 percent.
 

In 2012, the growth trend in the number of cash withdrawal machines continued.  Most of the growth was in cash dispenser machines, which are owned by private companies and operated by the businesses in which they are positioned.  Since these are private machines, the banknotes distributed through them are not inspected by counterfeiting identification or quality control machines that the Bank of Israel requires of cash centers.  Means of cash withdrawal were also installed at marketing chains and gas stations.  In parallel, banking corporations added machines for the self-service deposit of coins and banknotes, with the aim of streamlining customer service and lower the costs of handling cash.
 

Cash continues to be a main means of payment.  In 2012, the public withdrew (from banks and automatic machines) a total of NIS 205 billion—higher than the volume of transactions on credit cards, which was about NIS 139 billion.
 
The survey also shows that cash constitutes the main means of payment for amounts ranging from NIS 100 to NIS 200, followed by credit cards, while the use of checks for such transactions is low.
 
Main activities of the Currency Department in 2012

In 2012, the Currency Department continued to prepare the new series of banknotes—a complex process that lasts a few years.  In April 2011, the government approved the images that will appear on the banknotes—Rachel the Poetess on the NIS 20 note, poet Shaul Tchernichovsky on the NIS 50 note, poetess and author Leah Goldberg on the NIS 100 note, and poet Natan Altermann on the NIS 200 note.  In April 2013, the government approved the design, security features and other components of the banknotes.  The Bank of Israel will issue the new series of banknotes in two rounds: the NIS 50 and NIS 200 banknotes will be issued in the second half of 2014, with the other two denominations being issued in the first half of 2015.
 
The Bank of Israel is making every effort to make sure that the new banknotes will be very advanced technologically and in line with the highest accepted standards in the developed world, with the aim of ensuring the public’s trust in the banknotes.  They will bear the most advanced security features and will be among the most advanced in the world.
In order to adjust the Currency Department’s counting and sorting system to the security features of the new series, the Department has integrated new technologies and equipment into the system.  In parallel, the Department is working to ensure the economy’s preparedness for the replacement of the banknotes, in conjunction with representatives of the banks and the Association of Banks, representatives of the companies operating the vending machines and the counting and sorting machines, and other relevant parties.
 
 
In 2012, the Currency Department continued its emergency preparedness, with the aim of ensuring that the money supply continue unhindered throughout Israel during emergencies.
 
A number of conferences of the designated forum for the prevention of currency counterfeiting were held this year.  In addition to representatives of the Bank of Israel Currency Department, this forum includes representatives from the Israel Policy, the banking corporations, and the Association of Banks.  It formulates ways to prevent counterfeiting, locating counterfeit money, and deal with it.  One of the main ways is through the security features on banknotes, a detailed explanation of which is included in this survey (see Chapter 5, Section 2).
 
In recent years, the number of cases where advertisers make use of photocopied or simulated banknotes has grown.  The Bank of Israel would like to bring to the public’s attention and that of advertising and distribution companies the restrictions and prohibitions in place on copying banknotes and publication of the copies.  (See Chapter 5, Box 5.)
 
In 2012, a commemorative coin issued by the Bank of Israel won the ninth Vicenza Numismatica international competition.  This competition specializes in collectible banknotes, coins and medals, and the Israeli commemorative coin won first place in the “Most beautiful coin minted in 2011” category.  The winning coin is the coin issued to mark the Israeli delegation’s participation in the London 2012 Olympics, which was dedicated to the field of athletics.  The coin was designed by artist David Harel, and is made of silver with a face value of NIS 2.
 
Service to the public

The Bank of Israel Currency Department receives a wide variety of enquiries from the public.  This shows that the public is involved in the area of cash, as reflected in requests for information, reactions to the issuance of new coins and banknotes, suggestions, and enquiries regarding currency and awareness of the details appearing on the banknotes and coins.
 
The Currency Department provides the public with cash exchange services at the teller window at the Bank of Israel in Jerusalem.  It is also possible to exchange cash at the teller window at the impaired coins and banknotes branch.
 
Service to the public is provided Sundays to Thursdays from 8:00 am to 1:00 pm.
 
Phone:             02-655-2847
 
Public enquiries regarding currency can be referred to pniotz_matbea@boi.org.il
Or the Bank of Israel’s website at: http://www.boi.org.il/en/Currency