Join the mailing list
Including SMS messages

Financial Markets

Credit/ deposit window interest
Deposits 4%
Credit 5%
Valid until 29/02/24
Credit/ deposit window interest
Deposits 4%
Credit 5%
Valid until 29/02/24

The Bank of Israel is responsible for maintaining the stability of the foreign currency market. The Bank implements monetary policy using a variety of monetary tools, monitors and analyzes ongoing developments in the foreign currency market, and implements the Bank's exchange rate policy.

Tools for Implementing Monetary Policy

The Bank of Israel conducts its interest rate policy with the intention of attaining the inflation rate target set by the government. To that end, the Bank uses various monetary tools, including monetary loans to banking corporations, accepting monetary deposits from the banking corporations, a credit window and a deposit window, MAKAM (short-term Bank of Israel loan) issues, open market operations, and repos.


Deposit and/or loan auctions for the banks: These constitute the main tools used by the Bank to achieve the interest rate, because of the precision and speed of their effect. The Bank of Israel invites the banks to participate in auctions to borrow money from it for periods of one day or one week, or to deposit money with it for short periods - according to the situation in the money market and the rates of interest set in the auctions. Against loans they take from the Bank, the banks put up collateral, including government bonds and short-term loan certificates (known by their Hebrew acronym, MAKAM).

The monetary loans and deposits window: The Bank of Israel makes a window for monetary loans (against collateral) available to the banking corporations, with the interest on the loans set at a certain amount higher than the Bank's headline interest rate.  The Bank of Israel also makes a window for monetary deposits available to the banking corporations, with the interested on the deposits set at a certain amount below the Bank's headline interest rate.
 
Central bank bills (MAKAM): These are short-term securities (up to one year) issued by the Bank of Israel to affect the level of the interest rate in the money market. They are issued to the general public. Their yield is determined in trading on the stock exchange and can be used to calculate the public's inflation expectations and expectations of changes in monetary policy.

Repo: A repurchase agreement (repo) is a transaction in which the Bank of Israel sells, possibly by auction, government bonds and MAKAM to banks and financial institutions, and buys them back after one week at a pre-set price. In a reverse repo, the Bank of Israel purchases the government bonds and MAKAM from the banks and financial institutions, and sells them back after one week at a pre-set price. In the case of a reverse repo, the amount paid by the Bank of Israel for those securities serves to increase liquidity in the economy. The difference between the price at which the Bank of Israel buys the securities and the price at which it sells them back represents the interest. Repos are one of the important tools used by central banks in many advanced economies to conduct monetary policy.

Open market operations: Another tool that the Bank of Israel uses to provide liquidity is the purchase and sale of various types of government bonds for various terms in the secondary market.

Representative Exchange rates

The Bank of Israel monitors ongoing developments in the foreign currency market, analyzes them, and implements the Bank's exchange rate policy.

On each foreign currency business day in Israel, the Bank of Israel publishes the representative exchange rate of the shekel against foreign currencies. The representative rate is based on the rate prevailing in the market at the time it is set. Importantly, the representative rate is an indicator of the exchange rate in use but has no obligatory status under law.

More Information on Exchange Rates

Representative exchange rates

Up-to-date as of: 19/07
Currency name Representative rate
Up-to-date as of: 19/07
Daily change Graph
US Dollar USD 3.6620 Increase 0.715%
Pound GBP 4.7308 Increase 0.242%
100 Yen 100 units JPY 2.3279 Increase 0.189%
Euro EUR 3.9842 Increase 0.247%
Nominal Up-to-date as of: 19/07 Increase 0.454%

The Telbor market

​​In order to support the development of the short term interest rates market (the Telbor market), the Bank of Israel established in early 2007 an inter-organization committee, "The Telbor Interest Rate Committee". The main goal of the committee is to ensure that the commercial contributor banks operate reliably and transparently in the inter-bank market. To that end, the Committee determines the definitions, the contributors and the rules for calculating and publishing the fixing Telbor interest rates. The Telbor Interest Rate Committee is comprised of three representatives - Bank of Israel, Forex Israel and the Tel Aviv Stock Exchange - who cooperate with full transparency, and set fair rules in line with the developing situation of the inter-bank market.

More Information on the Telbor Market

Shekel overnight Interest Rate (SHIR)

The SHIR will be replacing the Telbor rate in interest rate derivative transactions, and will serve as the overnight interest rate for that day (same-day fixing). 

The decision to replace the Telbor rate is in line with decisions reached in major countries worldwide, according to which IBOR interest rates will be replaced with risk-free overnight interest rates.

More Information on Shir Interest Rate