Full report (Hebrew)​
  • Cash in circulation increased by 3 percent in 2016,
    compared with an increase of about 16 percent in 2015, to a value of about NIS
    76 billion. It should be noted that until May 2017, the value of cash in
    circulation increased by 4.3 percent. Cash in circulation has increased by a
    yearly average of 11 percent in the past decade.
  • In 2016, the public withdrew about NIS 230 billion
    in cash from the banks, a decline of 1 percent compared with 2015.
  • Similar to previous years, the increase in the value
    of circulation of banknotes, is mainly reflected in the increase in the number
    of banknotes in the NIS 200 denomination, which accounted for 49 percent of
    banknote circulation at the end of 2016. By May 2017, 89 percent of the Series
    B NIS 50 banknotes in circulation had been replaced by banknotes from Series C
    (with the portrait of Shaul Tchernichovsky, which were launched in September
    2014), and 65 percent of the Series B NIS 200 banknotes had been replaced with
    banknotes from Series C (with the portrait of Natan Alterman, which was launched
    in December 2015).

The
Bank of Israel Currency Department operates on the basis of the authorities set
out in the Bank of Israel Law concerning the issue of banknotes, coins and
commemorative coins, and concerning the regulation of the cash system. There
are three organizational branches within the Department—the Policy, Planning
and Control Unit, the Issuance Division, and the Cash Management Division. The
Department is responsible for the cash in Israel, from planning the quantity of
cash in accordance with projected demand, through the design and issue of
banknotes, coins and commemorative coins, including the security features
embedded in them, to the operational regulation of the cash system.

 

The
value of cash in circulation at the end of 2016 was NIS 76 billion, reflecting an
increase of about 3 percent from the previous year, compared with an average
annual increase of 11 percent over the past decade. Despite developments in
alternative means of payment, the low growth rate in the value of cash in
circulation can still not be attributed to those developments, since the
increase in circulation in the first four months of 2017 is 4.3 percent. It
seems that the low increase in 2016 is a correction of the growth rate in 2015,
of 16 percent, which exceeded the average of the past decade, such that the
average growth in the past two years is not much different than the average of
previous years.

 

In
2016, the Bank of Israel Currency Department began conducting methodical
surveys, which provide a significant tool in understanding cash use habits and
trends. The findings of the surveys are detailed in depth in the Annual Report.

 

During
the reviewed year, the Currency Department formulated the Bank of Israel Rules
(Rules for the Proper Operation of the Currency System) with the aim of
regulating various operational aspects of the currency system, including the
operation of cash centers, mainly in order to maintain the quality of currency
in circulation and to increase the efficiency of dealing with counterfeiting. These
rules took effect in 2017.

 

The
Department also initiated an emergency preparedness drill on a broad scale,
which included the banking corporations, the Postal Company, messenger
companies and other entities. The drill, which was notably successful,
emphasized the continuity of the currency supply in various emergency
scenarios.

 

In
addition, the Currency Department continued to invest resources in upgrading
the computerized infrastructure and information systems in order to improve and
streamline the currency system. Among other things, the Currency Department
reached the advanced stages of development of an analysis, tracking and control
system based on the serial numbers of Series C New Shekel banknotes.

 

During
the year, the process of replacing Series B banknotes with Series C banknotes
continued. The Bank of Israel launched the new NIS 50 banknote in 2014, and by
May 2017, about 89 percent of the banknotes in circulation had been replaced
with banknotes from the new series. The new NIS 200 banknote was launched in
2015, and about 65 percent of the banknotes of this denomination have been
replaced. The Bank of Israel will soon be launching the remaining denominations
in the new series—the NIS 100 denomination and the NIS 20 denomination. The
replacement of the series is intended to upgrade the security features in order
to lower the risk of counterfeiting. The security features on the new banknotes
are among the most advanced of their type, and are unique in that they are very
easy for the public to identify yet very difficult to counterfeit.

 

Public awareness of the security features on the banknote is of
particular importance during the launch of new banknotes, since counterfeiters
will always try to take advantage of the public’s lack of familiarity with the
banknote in order to distribute low-quality copied or counterfeit banknotes. Since
this is a common phenomenon around the world, the Currency Department is acting
to make the tools and means for recognizing the new banknote and its security
features accessible to the public in advance. This is being done through a
variety of means, including announcements and public information pamphlets in a
variety of languages, a dedicated website at www.newbanknotes.org.il, the Bank of Israel website, and a telephone call center at
1-800-300-018.


 

 

Data on currency circulation:

 

 

Table 1: Currency in Circulation, year-end

Components of circulation (NIS billion)

Rate of increase (percent)

Year

 

Banknotes

Coins

Total Circulation

 

Banknotes

Coins

Total Circulation

2007

27.8

1.2

29.0

14

7

13

2008

33.1

1.3

34.4

19

6

19

2009

40.1

1.4

41.5

21

7

21

2010

43.4

1.5

44.8

8

7

8

2011

47.4

1.6

49.0

9

6

9

2012

53.1

1.7

54.8

12

6

12

2013

55.7

1.8

57.5

5

9

5

2014

61.3

1.9

63.2

10

7

10

2015

71.4

2.1

73.5

17

8

16

2016

 

73.8

2.2

76.0

 

3

6

3

SOURCE:
Currency Department.

 

 

Table 2: Number of Banknotes by Denomination, 2009–16 (year-end,
millions of banknotes)

2009

2010

2011

2012

2013

2014

2015

2016

Rate of change in 2016 (percent)

NIS
20

32

35

34

35

36

36

37

40

6

NIS
50

51

48

46

51

51

54

60

61

2

NIS
100

154

145

141

146

147

152

165

169

2

NIS
200

107

129

152

176

189

213

256

266

4

Total

 

344

357

373

408

423

455

518

534

3

SOURCE:
Currency Department.