Foreign investors realize $1.6 billion from short-term bond sales
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Foreigners invest $330M in government bonds

Bank of Israel figures show foreign investors still dodging requirement to report large volume foreign exchange, short-term bond transactions

Foreign investors are still dodging the Bank of Israel's accountability requirement introduced over six months ago, whereby they must report large volume foreign exchange and short-term bond transactions.


Data published Monday by the Bank of Israel's Information and Statistics Department show net foreign investments for October (investments minus sales) amounted to some $330 million in government bond purchases, particularly non- index linked bonds.


The foreign investors also realized some $1.6 billion from short-term bond sales, continuing the trend of the past five months in which foreign investors realized an accrued $4.2 billion in sales of short term bonds while buying about $3.6 billion in purchases of short and mid-term government bonds.


The accountability requirement aims to undermine foreign investors which employ speculative maneuvers and capitalize on the dollar and the euro interest rate gap.


These investors usually operate under the radar and the accountability requirement aims to uncloak their identity to the Bank of Israel.


The accountability requirement applies to all forex transactions above $10 million a day, and STB and bond transactions amounting to NIS 10 million (about $2.67 million) a day for a period of up to one year made by foreign residents.


To dodge the accountability requirement, foreign investors move their money from one-year short-term bonds to non-index linked government bonds traded on the market with a maturity date of one to two years.


Click here to read this report in Hebrew



פרסום ראשון: 12.05.11, 15:03
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