The central bank will continue to set representative exchange rates daily.
The Bank of Israel will not abolish representative exchanges rate, which will continue to be set daily. The Bank of Israel held from the start that the issue of abolishing representative rates was blown out of all proportion, and that its deliberations on the matter needless raised expectations.
The Bank of Israel concluded that representative exchange rates are important because they provides an indication about changes in exchange rates and the nature and direction of Israel’s foreign currency market.
Representative exchange rates function similarly to the Consumer Price Index (CPI), which gives direction to consumers, who cannot go to stores to sees prices for themselves. In addition, most countries give representative exchange rates for their currencies.
Bank of Israel sources said that the majority of replies from market entities favored retaining representative exchange rates.
Published by Globes [online], Israel business news - www.globes.co.il - on July 30, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007