The Israeli shekel joined the foreign exchange market's CLS Bank global settlement system Monday, making it available for international payment instructions.
In a CLS statement, the bank announced that "Following regulatory approval, the Mexican Peso and Israeli Shekel have been designated as CLS Bank Settlement Eligible Currencies… The extension of the CLS Bank service to these currencies enhances systemic stability in the settlement of foreign exchange transactions, and over half of all CLS Bank Members will be able to settle in these two currencies immediately."
The shekels and the peso join the CLS' other 15 eligible Currencies: The US dollar, the Australian, Canadian, New Zealand Hong Kong and Singapore dollars, the Danish and Norwegian krones, the euro, the yen, the Korean Won, the South African rand, the Swedish krona, the Swiss franc and the UK pound sterling.
The Bank of Israel has been in contact with CLS on the matter since 2004 and had consistently pushed Israeli banks to meet the CLS criteria. The induction of the shekel into the CLS system is considered a very important step towards upgrading Israel's financial infrastructure. Bank Hapoalim and Bank Leumi are registered CLS members.
Rob Close, Chief Executive Officer of CLS Group and President and CEO of CLS Bank, said: "Bringing the benefits of CLS Settlement to an ever wider community of stakeholders is central to our strategy of growing the value of CLS to the market... The local banking systems in Israel and Mexico will also experience the risk and efficiency benefits that CLS participation will bring, and we are very pleased to welcome these two new currencies to the CLS community.”
Governor of the Bank of Israel Stanley Fischer said Monday that Israel induction into the CLS system "is a significant step in Israel’s increasing integration into the global economy. By reducing settlement risk in FX transactions, vital to Israel’s open economy, it reinforces the stability and efficiency of Israel’s banks and financial system, and benefits the entire economy.
"We are pleased that the ongoing reform of the payments system undertaken by the Bank of Israel, including the introduction of an RTGS system and adoption of a modern payments system law, along with the Bank’s close cooperation with CLS Bank, the new Israeli members of the CLS service and others has made this possible.”