Israeli currency will go into circulation tomorrow it was announced at a press conference here today by Eliezer Kaplan, Minister of Finance.
The Jewish population will be given a month’s grace to exchange the British-issued Palestine pound for Israeli notes. After September 15, only Israeli currency will circulate in the country. Former Palestine notes will be considered foreign exchange after that date.
The official rate of exchange will be $4.00 to the Israeli pound, Kaplan said, but pointed out that in order to attract dollars in the form of payment for exports the Government will continue to grant bonuses for exported products so that the actual rate for these exchanges will be $3.00 to the pound.
The exact quantity of the notes which will be placed on the market will depend on the demand, Minister Kaplan said. The currency will not as yet bear the name of Israel, since it was printed in the United States before the state of Israel was proclaimed. The issuing authority of the Israeli notes is the Anglo-Palestine Bank.
The Israeli Minister emphasized that the government of the Jewish state will demand the “defrosting” by Britain of approximately 50,000,000 Palestine pounds which are now blocked in London. This sum has been invested by the Mandatory Currency Board in British securities to cover the Palestine pound. In addition, about 25,000,000 Palestine pounds, held in banks in England by private individuals, are also blocked. The Israeli Government, he pointed out, will request the deblocking of these accounts, too. The Minister expressed the hope that “the Israeli pound will be internally and externally no weaker than the Palestine pound, since high cover is available.” Bankers and business firms have already informed the Israeli Government that they are satisfied that financial correctness has been maintained by the Provisional Government in issuing the new currency.
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