Israel’s decision to devalue its currency was taken with full endorsement and encouragement of the International Monetary Fund, the world financial agency said in a statement in Washington. One effect of the currency devaluation would be to make imports more expensive, thus serving as a means of “natural protection” for Israeli industry, it was pointed out. The International Monetary Fund serves in a regulatory role in helping to naturalize exchange rates of its foreign members.
In New York, banking circles noted that the move was a step toward convertibility but said full convertibility would have to await a demonstration that Israel’s economy could support the currency at its new level. They emphasized that Israeli bonds and other foreign obligations would be unaffected by the move as they are denominated in dollars or tied to the value of the dollar.
Foreign exchange traders in New York say there have been practically no large-scale transactions in Israeli pounds in this country. They also say there is no likelihood of a change in that situation soon, and practically all purchases from Israel or sales to Israel are priced in U.S. dollars.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
