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Israel to Issue Its Own Currency: Notes Printed in United States Under Secrecy

August 6, 1948
See Original Daily Bulletin From This Date

The Government of Israel has decided to issue its own currency in place of the present British-issued Palestine pound which is circulating not only in Palestine but in Tran Jordan, it was learned here today.

The newly-printed currency has already arrived in Israel. It was engraved in the United States more than four months ago — one month before the British relinquished the Palestine Mandate on May 15. The Israeli currency was delivered to the Jewish state under strong guard and under the most secret conditions.

Due to the tins lag necessary to print the new currency, an interesting snag arose here. When the order was placed for the new notes, it was still uncertain whether there would ever be an independent Jewish state and the name of “Israel” appears nowhere on the currency. The notes are issued not by the Israeli Government “but by the issuing department of the Anglo-American bank under the authority of the Tel Aviv administration.

The backing for the new notes is comparatively high. Almost 50 percent of the entire issue is covered by gold and other “hard” currencies and balances held in London, but this last fact may cause some complications as Israeli’s sterling balances there are not, readily negotiable.

The notes will be issued in denominations of a half-pound, one pound, five pounds, ten pounds and 50 pounds. There will be no new coinage for the tine being. The entire issue, it is understood, follows recommendations made by the United Nations International Monetary Fund. There is, however, a current of uneasiness among certain Tel Aviv groups over its possible outcome. Already speculators have been busy, and the price of the gold sovereign here has risen above eight pounds sterling, which is almost 30 percent higher than the current quotation in Cairo.

Apart from this slight nervousness, the Israel Government seems confident that it can handle this operation without impairing its credit standing and, at the same time, gain increased liberty of action in the financial field where it has hitherto been severely restricted.

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