Israel’s foreign currency reserves, a constant source of concern to the tiny nation, dropped to a point in September that some economists consider to be the danger level, the Bank of Israel said today. Urgent corrective measures were required by the Government, officials said, but there was no indication that they would be taken.
The Bank said that the treasury’s reserves fell by another $25 million last month and now stand at $510 million. The reserves are now barely sufficient to finance three months’ imports. Officials said that foreign currency reserve losses since April total $185 million because of increased military spending which now amounts to $3 million a day.
Israel is spending 21 percent of its gross national product on its military budget — almost twice that of its pre-June, 1967 defense budget. The problem was discussed by Mrs. Golda Meir, Israel’s Premier, when she conferred last month with President M. Nixon in Washington. She asked for $1 billion in United States aid over a five year period to help stem the foreign currency drain.
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