The amount of credit in the economy remained unchanged at NIS 680 billion in September, the same amount as in August, the Bank of Israel reported today. The amount of credit fell steadily in January-August, due to the recession and the strict credit restrictions imposed on the banks by Supervisor of Banks Yoav Lehman.
The public's total unlinked shekel assets (the shekel mountain) grew by 1.1%, or NIS 3 billion, in September, reaching NIS 274.2 billion. Total unlinked shekel assets grew by 2.4%, or over NIS 6.5 billion, in the third quarter of 2003. Unlinked shekel assets account for a quarter of the public's total financial assets.
The data indicate that the credit crunch has persisted since January. Total credit fell by 3.3%, or NIS 23 billion, in January-September. A combination of factors is responsible for the decline in credit: the recession, Lehman's credit restrictions, and increasing opportunities for companies to raise financial resources on the Tel Aviv Stock Exchange.
Unlinked shekel credit unexpectedly fell by 1.4%, or NIS 3 billion, in September, despite the deflation. Unlinked shekel credit unexpectedly fell by 2.7%, or NIS 5.5 billion, in the third quarter. Total unlinked shekel credit in September was NIS 197 billion.
CPI-linked credit remained unchanged in September, at NIS 260 billion, although it fell by 1.3%, or NIS 3.3 billion, in the third quarter. CPI-linked credit fell by 3.5%, or NIS 9.4 billion, in January-September
Foreign currency credit rose by 1.5%, or NIS 2.2 billion, in September, to NIS 142.2 billion. However, foreign currency credit fell by 8.7%, or NIS 13.6 billion, in January-September, in line with the shekel appreciation against the dollar.
Direct foreign credit remained unchanged in September, at NIS 72.3 billion. Direct foreign credit fell by 8.4%, or NIS 6.6 billion, in January-September.
Published by Globes [online] - www.globes.co.il - on October 23, 2003