Jakarta, CNBC Indonesia - Entering the second week of Middle Eastern\nconflict between the United States and Israel against Iran that began in\nlate February, surprising news has emerged from Israel\u2019s central\nbank.<\/p>\n
Amidst escalating conflict that is driving war costs upward and\nheightened geopolitical uncertainty, Israel\u2019s foreign exchange reserves\nhave reached their highest level in history.<\/p>\n
The Bank of Israel reported that the country\u2019s foreign exchange\nreserves position at the end of February 2026 reached US$234.553\nbillion. This figure rose by US$1.511 billion compared with the end of\nJanuary 2026 position, marking a new record high. Relative to the size\nof its economy, Israel\u2019s foreign exchange reserve level equates to 38.2%\nof gross domestic product (GDP).<\/p>\n
This increase is particularly noteworthy as it occurred precisely\nwhen the Middle East descended into fresh turmoil. Days after the Bank\nof Israel decided to hold its benchmark interest rate in February, the\nUnited States and Israel launched attacks on Iran.<\/p>\n
In its interest rate decision, the Bank of Israel highlighted\nincreased geopolitical uncertainty, including the risk of conflict with\nIran, as one reason for maintaining interest rates.<\/p>\n
Why Israel\u2019s Foreign Exchange Reserves Surged During War<\/p>\n
The primary reason lies in the composition and valuation of the\nforeign exchange reserve assets themselves. The Bank of Israel confirmed\nthat the increase in foreign exchange reserves in February 2026 was\nprimarily caused by asset revaluation that added approximately US$1.739\nbillion to the reserve value.<\/p>\n
Meanwhile, government foreign exchange activity actually reduced\nreserves by approximately US$271 million. In other words, Israel\u2019s surge\nin foreign exchange reserves was not primarily due to a flood of new\ndollars entering the country, but rather because the value of the\nreserve asset portfolio it holds also increased.<\/p>\n
Israel\u2019s foreign exchange reserves reaching record levels provide a\nstrong cushion for the shekel\u2019s exchange rate value amid war. With\nsubstantial foreign currency buffers, the Bank of Israel has greater\nlatitude to maintain market stability and dampen shekel fluctuations if\nexternal pressures intensify. However, the daily direction of the shekel\nremains heavily determined by developments in the war and global\ninvestor sentiment.<\/p>\n
In terms of movement, according to Refinitiv, Israel\u2019s currency, the\nshekel (ILS), is currently in an uptrend against the US dollar.<\/p>\n
This is clearly evident over the past 12 months, with the shekel\nstrengthening approximately 14.82% against the greenback. With the\nlatest exchange rate at Monday\u2019s (9 March 2026) trading close positioned\nat ILS 3.082\/US$, or strengthening 0.35% in a single day.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/escalating-war-yet-israels-foreign-exchange-reserves-hit-record-high-1773125765", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }