Free bank credit continues to rapidly expand, despite the slowdown in economic activity. The expansion in bank credit stems from the sharp increase in the banks’ direct credit in foreign currency, and index-linked shekel credit.
According to bank data, the banks’ free credit totaled NIS 277.2 billion in September, compared to NIS 249.9 in December, a 10.9% increase.
The banks’ foreign currency credit amounted to over $18.7 billion in September, a sharp 12.5% rise since the beginning of the year. This continues the trend set in ’94, following the large gap between the dollar interest rate overseas and the shekel rate in Israel, due to the restraining interest rate policy of the Bank of Israel. Since ’94, total foreign currency credit increased by $14.6 billion, a 4.5 fold growth.
Published by Israel's Business Arena October 8, 1998