The Bank of Israel issued today (Tuesday) a new directive according to which banks must report once a week on money transfers abroad. This, in contrast to the previous procedure that required monthly reporting. In this way, in fact, the central bank is increasing the supervision of money transfers outside of Israel.
● Moody’s with an unusual warning: Israel’s credit rating is in danger if the legal reform is fully adopted
The new procedure comes amid the publication of the Bank of Israel’s foreign exchange balances, which revealed that the central bank did not intervene in the currency market in February, despite the strengthening of the dollar against the shekel by about 6% that month. The publication fueled rumors of central bank intervention, but it seems that it is closely monitoring The fluctuations in the foreign exchange market against the background of the legal reform and the warnings about spending money in Israel.
The flight of funds from the institutional bodies outside of Israel will be an indication of Israel’s economic situation and can lead to a storm in the exchange rate of the shekel against the foreign currencies.
Increasing the frequency of reporting on the transfer of capital abroad strengthens the central bank’s ability to respond to sharp movements that could undermine the status of the shekel.