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Israel Sets Down New FX Derivs Rules

Bank of Israel has imposed a reserve requirement for foreign exchange derivative transactions by non-residents.

Bank of Israel has imposed a reserve requirement for foreign exchange derivative transactions by non-residents, Reuters reports. Banks in the country will have to meet a 10% reserve requirement on shekel/foreign exchange swaps and forwards.

The rule will be applicable from Jan. 27, 2011. The measure will make transactions more expensive for local banks as they will not get interest on the 10% reserves and this will carry over to foreign banks.

Click here for the story from Reuters.

Click here for the additional coverage from Bloomberg.

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