The rapid devaluation of the Shekel has triggered a surge of demand for foreign currency, chiefly the U.S. Dollar, as the public becomes increasingly aware of the country’s dire financial condition. Bank branches all over the country were jammed.
The Treasury yesterday reduced the Shekel by 0.9 percent against the Dollar and 1.5 percent against European currencies. Only last month it was devalued by 11.5 percent against the Swiss Franc; II percent against the German Mark; 8.5 percent against the Pound Sterling; and 8.1 percent against the Dollar.
These urgent moves are intended to improve Israel’s balance of payments abroad. The Bank of Israel announced yesterday that Israel’s foreign currency reserves decreased by $98 million last month. They now total $2.954 billion. The public expects further devaluation to ease the foreign debt and is buying Dollars before they become even more expensive.
Government controlled prices were increased Sunday night by six percent for food products, mainly bread and milk and 10 percent for gasoline.
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