JERUSALEM (Sep. 17)
The Israel Pound continued its rapid decline relative to the U.S. dollar today precipitating a rush on banks to purchase dollars and a trend away from government bonds linked to the cost-of-living index. As of midnight last night the Pound stood at IL 28.63 – $1, an overnight drop of 20 Agorot. One hundred Agorot equal one Pound.
The Pound was devalued by 1.25 percent to the Swiss franc and by one percent to the West German mark. Public fears that the government will soon tighten foreign currency controls was seen responsible for the panic buying of dollars. Under present regulations, every citizen may purchase up to $3000 but recent reports about Israel’s worsening balance of payments situation have given rise to rumors that the government sooner or later will have to reduce the foreign currency supply. Both the Treasury and the Bank of Israel denied that any such move is in the making.