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December 8, 2016 / 8 Kislev, 5777

Posts Tagged ‘Bank of Israel’

Bank of Israel to Purchase $1.5B in 2017

Monday, November 14th, 2016

Israel’s production of natural gas is having an impact on the local economy: “As it announced May 13, 2013, the Bank of Israel, announces it will purchase $1.5 billion in 2017 to offset the effect of natural gas production,” the BOI said in a statement on Monday (Nov 14).

The purchase of foreign exchange in the coming years is in line with the estimated effect of natural gas production on the balance of payments, the Bank explained.

The Bank’s assessments of the total impact on the balance of payments resulting from natural gas production and the foreign exchange purchases is to be updated periodically and reported to the public. The Bank of Israel projected the overall effect of natural gas production on the balance of payments in 2017 will be $1.5 billion. The BOI said it would therefore purchase foreign currency during 2017 accordingly.

The projection has been affected by, among other factors, the drop in global energy prices, which decreases the effect of natural gas production in Israel on the exchange rate. The Bank said its purchase program is an additional instrument of the BOI’s monetary policy and of exchange rate policy with which it is consistent.

The Bank of Israel said it will continue to operate in the foreign exchange market in situations of exchange rate fluctuations which are not in line with fundamental economic conditions, or when the foreign exchange market is disorderly.

Hana Levi Julian

BOI Keeps Interest Rate Unchanged for September

Monday, August 29th, 2016

The Bank of Israel kept the interest rate unchanged at 0.1 percent for September, the governor announced Monday.

The decision came in light of an increase of 0.4 percent in the consumer price index in July, a bit higher than the 0.2 percent prediction by forecasters. Housing increased by 1.2 percent. The CPI has increased by 0.8 over the past 12 months.

There was, however, no significant change over the month in inflation expectations for the various ranges, according to the BOI report for August.

Jewish Press News Briefs

Haredi Party Spearheading Effort to Protect Israeli Religious Charities from US Tax Authorities

Tuesday, June 7th, 2016

The heads of charity organizations in the ultra-Orthodox society, commonly known as Gemachim, received at least a temporary measure of relief from the Knesset Finance Committee, chaired by MK Moshe Gafni (UTJ), ahead of a new amendment of the Income Tax Act that takes effect in September and compels Israeli financial institutions to report through the local tax authorities on the Israeli financial affairs of US citizens. The amendment is the result of the Foreign Account Tax Compliance (FATCA) agreement between Israel and the US, which was a prerequisite for continued cooperation between Israeli and American financial institutions.

It’s not much, but MK Gafni demanded that the Finance Ministry and the Bank of Israel order the banks to give the Gemachim time until the end of June to resolve their status as public institutions, which he hopes would allow them to exclude themselves from the FATCA rules. Gafni envisions a tweaking of the amendment to exclude groups with deposits of less than $50 thousand, or holdings worth less than $50 million.

According to Chairman Gafni, the new regulations could bring the collapse of the Gemachim. “The Israeli government signed an agreement with the US government without considering the disastrous consequences for one of the most important enterprises of the Jewish people that has existed for millennia — the charity and mutual aid societies,” Gafni said, explaining that the Gemachim are “the only means at the disposal of a person under financial duress to receive an interest-free loan to get back on his feet.”

MK Israel Eichler (UTJ), Chairman of the Public Petitions, summoned Dr. Ilan Steiner, Director of the Bank of Israel Currency Department, to his committee hearing, to warn him against another aspect of the US attack on these charity institutions. According to Eichler, banks are being forced under pressure from foreign governments to close the accounts of Gemachim accounts, “in the name of ‘fighting terrorism’ and stopping money laundering, the IRS and the American government have become supervisors of all bank accounts around the world including in Israel. Everyone has to go through their inspection, so the Gemachim have received a letter that they will not be able to keep their bank accounts anymore.”

MK Eichler told Dr. Steiner: “I hope that the Bank of Israel find a way to abide by the agreements with the US while not mixing up the Gemachim with the war on terror. The banks must not become a burden and a restriction on associations and charity organizations who want to help people and do not engage in terrorism. There are limits to the madness of the banking system. We must not allow the charity organizations and Gemachim to be paralyzed by American pressures.”

The issues of compliance regarding money laundering and the war on terror stem from the side benefits of an IRS act that was intended to make sure US citizens who make money abroad share some of it with Uncle Sam. According to the IRS, FATCA targets tax non-compliance by US taxpayers with foreign accounts, focusing on individuals’ reporting about foreign financial accounts and offshore assets, as well as by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest.

Using the US’ enormous economic clout, FATCA bullies the world’s financial institutions into reporting on their American clients to Uncle Sam. Under FATCA, to avoid being withheld upon, foreign financial institutions must register with the IRS and agree to report to the IRS about their US accounts, including accounts of foreign entities with a substantial US ownership. Foreign institutions that enter into an agreement with the IRS to report on their account holders may be required to withhold 30% on certain payments to foreign payees if such payees do not comply with FATCA.

Talk about working for the Yankee dollar.

According to The Marker, Gemachim stand to suffer three different ways from the new law: instead of permitting a Gemach to transfer money into their accounts, they could now be questioned regarding the source of the funds and whether or not tax was paid on them in the US; each deposit could be subject to harassment by the bank, in order to verify that it is not part of a money laundering scheme; and the Gemach could be saddled with a new definition as a financial institution, and as such would be compelled to report on its fund sources to the IRS or face criminal sanctions.

JNi.Media

Is Jerusalem Truly Israel’s Capital?

Saturday, June 4th, 2016

Since 2006 there are no foreign embassies in Jerusalem. This obviously reflects the reluctance of the entire world that does have diplomatic relations with the Jewish State to recognize its ownership of Jerusalem. It is a unique phenomenon in world affairs. Not only do the nations of the world not accept Jerusalem’s status as Israel’s capital, the international community also regards about half of it, eastern Jerusalem, including the entire Old City, as part of the “occupied Palestinian territories,” and no one officially recognizes western Jerusalem as part of the territory of Israel either.

Under the United Nations Partition Plan for Palestine adopted by the General Assembly of the United Nations in 1947, Jerusalem was going to be an international territory administered by the United Nations. In the 1948 war, the western part of the city was occupied by Israel, the eastern part by Jordan. And since the international community relies on the 1947 UN partition plan regarding the legal status of Jerusalem, it refuses to recognize Israeli sovereignty over any part of the city.

Israel, obviously, feels very differently about this matter: On December 5, 1949, Prime Minister David Ben-Gurion, proclaimed Jerusalem as Israel’s capital, and in July 1980 Israel passed the Jerusalem Law, as part of its constitutional Basic Laws, declaring Jerusalem the “complete and united” capital of Israel.

Jerusalem, which for the first 19 years of the state was a remote, unsafe (Jordanian snipers), small and joyless (Tel Aviv ruled), was transformed after the 1967 liberation of the Old City and the holy sites, exactly 49 years ago Sunday. Today 10% of Israelis live in Jerusalem — 850,000, twice as many as live in Tel Aviv, three times as do in Haifa.

When King David conquered the city and purchased the top of Temple Mount, just under 3,000 years ago, the entire city area was probably about 60 hectares. Today it is about 2,000 times larger, with 125,156 hectares included in the Jerusalem municipality.

The first university in the Land of Israel, Hebrew University, was established in Jerusalem, in 1925. Today 17% of Israeli university students study there, and 26% of the Ph.D. candidates.

Many Israeli national institutions are located in the Government District in Givat Ram in Jerusalem, as a part of the National District. Some government buildings are located in the Menachem Begin District. The city is home to the Knesset, the Supreme Court, the Bank of Israel, the National Headquarters of the Israel Police, the official residences of the President and Prime Minister, the Cabinet, and all ministries except for the Ministry of Defense (Tel Aviv) and the Ministry of Agriculture and Rural Development (Rishon LeZion).

And so it is clear that no other issue separates Israel from the rest of the world as radically as that of Jerusalem’s status. Most Israelis born after 1967 naturally view Jerusalem as their unquestionable capital. Leftwing Israelis who would agree to handing over some or all of eastern Jerusalem to a future independent Palestinian entity, are probably not aware of the fact that the world does not differentiate between eastern and western Jerusalem, and regards neither as naturally belonging to Israel, never mind recognizing them as its capital.

JNi.Media

Bank Leumi to Cut 10 Percent of Work Force

Wednesday, May 25th, 2016

Bank Leumi plans to cut at least 10 percent of its work force, according to the draft of a five-year plan presented this week to the Bank of Israel.

In the first year of the bank’s reorganization plan, more than a thousand workers are to be laid off, according to Israel Radio.

Approximately 100 employees per year will be laid off in the next four years, most of whom will be those who are ready to retire.

Bank Leumi is one of the largest banks in Israel.

Hana Levi Julian

Shekel-Dollar Rate Sinks after Interest Rate Left Unchanged

Thursday, September 24th, 2015

The shekel-dollar rate plummeted to 3.92 Thursday afternoon after the Bank of Israel announced it is leaving the interest rate unchanged next month.

Before the announcement, the local currency traded above 3.95 shekels to the dollar on speculation that Bank would cut the rate which already is at a historic low of 0.1 percent.

The last time the shekel traded above the 3.94 level was in April, when it briefly crossed the 4.00 shekel level.

Jewish Press News Briefs

Netanyahu, Kahlon Cut Taxes to Spur Sluggish Economy

Thursday, September 3rd, 2015

Prime Minister Binyamin Netanyahu and Finance Minister Moshe Kahlon announced Thursday they will cut the sales tax (VAT) by one percent and do the same with the corporate tax.

Beginning October 1, the VAT will drop from 18 percent to 17 percent.

The corporate tax will drop from 26.5 percent to 25 percent, starting in January 2016.

It is estimated that the two benefits to consumers will cost the state approximately NIS 6.5 billion ($1.6 billion).

Bank of Israel Governor Karnit Flug, who is not in favor of the plan, immediately announced her criticism of the move.

But in a joint news conference Thursday afternoon, Netanyahu and Kahlon told reporters the move was designed to act as a “growth engine” on an economy that is slowing down.

“We believe in you, we believe in the free market, we believe in freedom,” the prime minister said. “I think this will help growth. I think this will give the economy the boost it needs. At a time when we are hearing about global slowdown, and here too, we want a growth engine and lowering taxes is one of them.”

Hana Levi Julian

Printed from: http://www.jewishpress.com/news/breaking-news/netanyahu-kahlon-cut-taxes-to-spur-sluggish-economy/2015/09/03/

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