Currency Department - Annual Review 2012

31/10/2013 |  Bank of Israel
All Press Releases In Subject:
Banknotes and Coins

Letter from the Head of the Currency Department
Banknotes and coins in circulation in 2012

The value of currency in circulation at the end of 2012 was about NIS 55 billion,
compared with NIS 49 billion at the end of 2011. This represents a rate of increase of 12
percent, which is higher than the rate of increase for 2011 (about 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 cash over interest-bearing deposits. Some of the increase in circulation can also
be attributed to inflation, which was 1.6 percent in 2012. Banknotes accounted for 97
percent (NIS 53.1 billion) of the total circulation value during the reviewed year, while
coins accounted for 3 percent (NIS 1.7 billion).
In 2012, the upward 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
automated teller machines. A survey conducted by the Currency Department in 2012 of
the public’s preference regarding the mix of banknotes in circulation indicated 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 also feel it when
providing change.