Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

ISRAEL

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of December 31, 2006)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: September 21, 1993.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictionsNo.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Israel is the new Israeli sheqel (NIS Law 1985).
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the new Israeli sheqel is determined on the basis of market forces.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangementsNo.
Administration of controlNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
References to legal instruments and hyperlinksForeign Exchange Control General Permit 1998, Section 2.
Resident Accounts
Foreign exchange accounts permittedBanks are required to classify the accounts of residents of areas under autonomous Palestinian administration as a separate group and to report these accounts on the basis of the same principles that apply to nonresident accounts.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksForeign Exchange Control General Permit 1998, Section 2.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksForeign Exchange Control General Permit 1998, Section 2.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Positive listn.a.
Negative listn.a.
Open general licensesn.a.
Licenses with quotasn.a.
Other nontariff measuresIsrael has taken steps to reduce tariffs and nontariff barriers, and there are plans to further reduce them. With the exception of agricultural products, imports are free of quantitative restrictions. A special regime applies to imports from countries that restrict or prohibit imports from Israel. Most of Israel’s trade is already covered by bilateral free trade agreements; additional free trade agreements with neighboring countries are under consideration.
Import taxes and/or tariffsNo.
State import monopolyNo.
References to legal instruments and hyperlinksForeign Exchange Control General Permit 1998, Section 2.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExcept for exports of oil and certain defense equipment, most exports do not require licenses.
Export taxesNo.
References to legal instruments and hyperlinksForeign Exchange Control General Permit 1998, Section 2.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsThere are no restrictions; however, residents’ investments abroad are subject to a reporting requirement regarding financial asset and direct investment balances abroad and also purchases and realizations of such assets above a certain threshold. In addition, there is a reporting requirement above a certain threshold regarding loans taken from nonresidents by Israeli residents or given by Israeli residents to nonresidents.
Repatriation requirementsNo.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksForeign Exchange Control General Permit 1998, Section 2.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThe same reserve requirement ratios apply to bank accounts held by residents and nonresidents. Reserve requirements against resident foreign currency accounts are denominated in local currency, whereas reserve requirements against nonresident foreign currency accounts are denominated in foreign currency.
Liquid asset requirementsYes.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsThe same reserve requirement ratios apply to bank accounts held by residents and nonresidents. Reserve requirements against resident foreign currency accounts are denominated in local currency, whereas reserve requirements against nonresident foreign currency accounts are denominated in foreign currency.
Liquid asset requirementsYes.
Provisions specific to institutional investors
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2006
No significant changes occurred in the exchange and trade system.

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