Shekel matured for convertibility

In Jerusalem there is a bank of Israel. On it, as it is not difficult to guess, is the main credit and financial institution of the Jewish state. Now fresh news from this building (which and in normal time can not complain about the lack of attention) straight is sent to the first lanes of Israeli newspapers. To the half-century anniversary of the existence of Israel (it will be celebrated on April 30) the central bank of the country promised to make a national monetary unit – Shekel – fully convertible. True, not all the details of the operation are still published, and it leaves a wide space for newspaper comments and private discussions.

It’s time for Shekel to turn into a solid currency, jointly announced the Minister of Finance Yakov Neeman and the manager of Israel, Jacob Frenkel in July 1997.

The Israeli monetary system survived over half a century different times: successful and not very. It began with the so-called "Pounds of the Anglo-Palestinian Bank". On these banknotes, issued in appeal in 1948, there was even the name of the country: he did not have time to approve. In the early 1980s, Israel overcame a high-inflation band, which forced the shekel in 1985 and introduce an existing so far "New Shekel". In the 90s, although inflation and exceeded slightly indicators of developed Western countries, in general, the country’s monetary authorities have learned to keep it under control. But the fee for the preservation of the relative stability of the Israeli monetary unit has still remained restrictions on the conversion of Shekel and on operations with foreign currency.

And now, government financiers considered that the state of the national economy allows them to refuse.

Starting from July last year, the Israeli Bank in several stages abolished a number of currency control measures affecting the interests of both private citizens (including foreigners) and companies.

Israeli businessmen allowed to play more active in external stock markets. First, insurance funds received the right to invest absent abroad to 5 percent of their savings (and not 2, as before), joint (trust) funds – up to 50 percent (instead of ten). The rest of the companies were allowed from the middle of last year to place in foreign currency and foreign securities of the amount equivalent to 15 percent of their turnover (or 25 percent of share capital).

Individuals were allowed to translate annually in favor of a foreign citizen or Israeli living abroad to $ 10.000 in the form of a gift or material assistance (until then, such translations were limited to the amount of $ 2.000). A special reservation is made about Israeli students studying abroad. Young people can count on another $ 2.500 beyond the usual 10-thousand limit. Recipients of compensation payments from Germany, as well as other foreign pensions now have the right to place these funds in bank accounts abroad. Previously, they were supposed to immediately translate into Israel.

On the first day of 1998, the citizens of Israel received the right to acquire foreign currency to put it on foreign currency accounts within the country, as well as translate it from one currency account to another. In principle, earlier such operations were allowed, but they demanded special permits.

Starting from the same moment, the Israeli Bank abolished still remaining restrictions on the investment of Israeli firms to foreign securities, and also introduced a number of rules that facilitate commercial banks work with foreign currency.

Further more. Since February 12, the Israelis, which are abroad, can open bank accounts there. Previously, it was allowed to do only on the 180th day of stay outside the promised land. The requirement to close these accounts before returning to Israel remains so far, if the interested party does not have a special permission of Israel’s bank and intends to spend more than 30 days at home.

On February 12, the Israelites and foreigners leaving the country through ground border crossings are allowed to acquire $ 1.000. It does not require any documents. Previously, the Israelis were deprived of this right at all, and for foreigners the quota was $ 500 per person.

Israeli enterprises this day brought the following relaxation. The firm producing securities abroad can accumulate funds from the foreign bank account proceeds (without requesting the permission of Israel to open this account before. And to the foreign trade companies to live a little easier, since temporary restrictions on the transfer of advances to foreign partners and receiving export income disappeared. Earlier, such a rule: the goods bought abroad should have been delivered to Israel no later than 12 months from the date of payment, and revenues for export deliveries had to achieve accounts in the Israeli bank no later than a year from the moment of shipment. Now all this is left at the discretion of the most sellers and buyers.

The confident progressive course of the Israeli currency reform was somewhat darkened by the rapid drop in Shekel’s course in March and early April. In local newspapers there were assumptions that the introduction of convertibility in such conditions is unlikely. March 17, the Israel Bank officially denied these insinuations. He confirmed that the decision taken by the Government last year is invariably. The bank stressed that the only serious sphere that has not yet been liberalized has remained foreign exchange operations of non-residents in Israel. Restrictions that persist here will be eliminated to the 50th anniversary of the state. The bank also noted that the shekel’s convertibility in settlements between legal entities has already happened.

By the way, by April 7, he managed to stop the fall of Shekel in relation to the dollar. On this day, the course of the Israeli monetary unit for the first time in almost a month "grown" (just 0.3%, but the main thing is not absolute figures, but the trend, especially since the reinforcement of Shekel continued).

At the same time, in statements of officials of the country slip notes that suggest that the final decision about what to understand "Complete convertibility", Not yet developed. The Israeli Bank offers the following interpretation: "All types of activity with foreign currency will be resolved, with the exception of a special list of limited operations". In this list, in particular, such an important thing may be preserved as the existing ban on citizens to purchase more than $ 7.000 for travel abroad. Israela Bank announced that he has not yet decided to cancel this restriction or not. Currently, the Israelis can purchase unlimited SCB sums only in order to put them on foreign exchange accounts within the country.

The Director General of the Prime Minister of Moshe Leon, at the end of March, expressed his special point of view, which is to customize the completion of currency liberalization to a certain date. "It does not matter, "he said, – whether the transformation of Shekel will take place in the convertible currency on Independence Day or a few months later. This step is not worth postponing the longer that suggests common sense, but it must be implemented by a thoughtful, responsible manner".