Decline in Foreign Currency Reserves in Israel Raises Concerns

SadaNews Economy - The latest data published by the Bank of Israel reveals a new decline in foreign currency reserves at the end of November 2025, highlighting the fragility of the economic situation amid internal tensions and market risks.

According to the Israeli newspaper Globes, reserves have decreased to $231.425 billion, down by $529 million compared to the record high recorded at the end of October. The newspaper adds that the level of reserves as a percentage of GDP remained at 39.7%, indicating an excessive reliance on external financial resources that are not expanding at the same rate.

Globes explains that this decline was mainly driven by government transactions in the foreign exchange market amounting to approximately $1.075 billion, of which only a small part was compensated through a revaluation of assets worth $568 million, suggesting that the improvement is not due to real financial inflows but rather a temporary accounting adjustment.

Although reserves increased compared to the end of November 2024 when they were at $217.174 billion, Globes points out that this annual increase is not a sufficient healthy indicator, especially amid continued pressures on the foreign exchange market and a decline in confidence in the economic policies' ability to protect the shekel.

The newspaper reminds that the Bank of Israel (the central bank) was forced in June 2025 to sell about $300 million in foreign currencies, marking the first sales since the early months of the war, indicating that interventions are no longer precautionary but rather necessary.

Globes recalled the bank's decision after the outbreak of war in October 2023 to sell up to $30 billion to support the shekel, but it was able to sell only $8.5 billion, mostly within just a few weeks, reflecting the limited impact and the depth of the crisis.