This paper describes the Bank of Israel's investment philosophy and policy. The paper focuses on the strategic asset allocation framework and the role of the Monetary Policy Committee in setting the investment strategy. The abundant FX reserves in recent years, and falling yields on traditional...

Recently a number of central banks, including the Bank of Israel (BOI), have started to add risky assets such as equities to the traditional investment assets. This chapter elaborates on BOI's motivations to add equities to its portfolio, describes the process of its move into investing in...