JERUSALEM (Nov. 7)
Israel’s tough foreign currency regulations will be eased somewhat to facilitate the inflow of foreign currency and stimulate foreign investments, the governor of the Bank of Israel announced at a news conference Thursday.
The proposed changes, subject to Cabinet and Knesset approval, will take effect “in the near future,” said Jacob Frenkel, the head of Israel’s central bank.
His announcement was received favorably by local investors, but sent prices down on the Tel Aviv Stock Exchange. Especially hard hit were issues traded overseas.
Under the revised rules, Israeli citizens will be allowed to hold foreign currency in Israeli banks and use it to buy and sell shares on overseas stock exchanges.
There will be no limit on the amount of foreign currency that may be held in Israeli banks. But it will have to be purchased with foreign currency, not shekels.
The sources, Frenkel said, might be foreign currency left over from the allowance granted for travel abroad or profits earned by Israelis from investments abroad.
Israelis will be able to withdraw foreign currency for travel, transfer it overseas or cash it in for shekels, he said.
The new rules include lower taxes on profits and easier terms for foreign investors and foreign residents who want to transfer money to Israel.