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Israel Takes First Step in Relaxing Foreign Currency Regulations

Israel’s foreign currency situation has improved to such an extent that the government will permit its citizens to maintain foreign currency accounts rather than force the conversion of all foreign currency into Israel pounds, it was officially announced here today. This first step in relaxation of currency controls, which will take effect next month will cover foreign currency received from insurance payments, commissions and earnings, proceeds from property sales, restitution payments and gifts.

Foreign currency receipts for the fiscal year 1954-55 totalled $398 million, an increase of $138 million over the previous year. This meant that the Treasury could double its foreign exchange reserve, which backs its currency, and could pay its debts abroad despite an increase in world commodity prices and a drop of nearly $30 million in American economic aid as compared with the year before. In this period, too, Israel decreased its short-term indebtedness from $63 million to $34 million.

Foreign currency receipts in the last fiscal year included the equivalent of $95 million from German reparations, over $88 million from exports and services, over $78 million from contributions to Jewish public institutions and $38 million from the sale of development bonds in the United States and other countries.

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