JERUSALEM, March 20 (Reuters) - Israel's central bank said its foreign exchange reserves portfolio made a return of 8.3% in 2023 after a 5.7% drop in 2022, boosted by a rebound in global financial markets.

Overall last year, the level of reserves (ILFXR=ECI) , opens new tab rose $10.5 billion to $204.7 billion, helped by capital gains from equity holdings as well as capital gains and interest income from bond holdings, the Bank of Israel said.

The big gain in reserves came despite the central bank selling $8.5 billion of foreign currency to defend the shekel after the Oct. 7 attacks on Israel by gunmen from Palestinian Islamist group Hamas.

The Bank of Israel launched a plan in October to sell up to $30 billion of forex but after selling $8. 2 billion worth in October and another $338 million in November, it has not needed further sales in the wake of a sharp rebound in the shekel without intervention.

Israel's forex reserves are 54 percent in government assets - largely foreign government bonds - 21 percent in equities, 15 percent in spread assets, and 10 percent in corporate bonds.

While the return on the portfolio jumped in 2023, the return has just been 3% over the past five years and 1.7% in the past three years.

In shekel terms, the portfolio grew 12.4% in 2023.

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https://www.reuters.com/markets/currencies/bank-israels-forex-portfolio-returned-83-2023-reached-205-billion-2024-03-20/