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15
BALANCE OF PAYMENTS
DEFINITIONS AND EXPLANATIONS
The balance of payments is compiled
according to the rules set down by
the International Monetary Fund (IMF)
(Balance of Payments Manual, 5th Ed.
International
Monetary
Fund,
This account sums up the receipts and
payments connected with the transfer
of ownership of goods and with the
provision of services, the income and
expenditure of production factors and
the current transfers which do not
entail any obligations. In the goods
items, values are recorded on a
f.o.b. basis (free on board), i.e.,
without expenditure on transport and
insurance. These services, if they
are to be included in the balance of
payments,
are
listed
in
the
respective service items.
Washington,
and is defined as a
systematic record of all economic
transactions carried out in a given
period between the domestic economy
and the rest of the world.
Since the 1999 Abstract the balance
of payments is shown in a new format.
This format adopted by international
statistics
agencies
and
by
most
countries,
allows
convenient
international comparisons of balance
of payment flows. Additionally, the
definitions and classifications in
the new format of the balance of
payments have been harmonized with
those
customary
in
the
National
Accounts,
thereby
obtaining
consistency between the international
flows and transactions and those in
the National Accounts.
Data since 1967 include estimates of
economic
transactions
between
residents of Israel and non-Israeli
residents of Judea, Samaria and the
Gaza Area (and Sinai until 1982).
The
balance
of
payments
report
consists of two main sections: a. The
current account, which includes trade
in goods and services, income and
expenditure from production factors capital
and
labour
and
current
transfers; b. capital and financial
account,
which
includes
capital
transfers
(mainly
by
immigrants),
direct
investments,
tradable
portfolio
investments,
other
investments and net reserve assets.
USA,
1993)
CAPITAL ACCOUNT AND
FINANCIAL ACCOUNT
The capital account includes capital
transfers
(formerly
included
in
unilateral transfers). Most of the
movements in the capital account are
transfers to Israel by immigrants.
The
components
of
the
financial
account are classified by types of
investments (domestic and foreign). A
subsidiary
classification
is
by
sector in economy which is further
classified by the legal repayment
date for liabilities and redemption
of foreign assets.
The main components of the financial
account are:
Direct investment - The criterion
that
distinguishes
between
direct
investment and portfolio investment
is the share of equity held by
investors. As a thumb rule, ownership
of one-tenth of equity or more makes
the investment a direct one, whereas
ownership of less than one-tenth of
equity is considered a portfolio
investment.
Portfolio investment - This category
reflects activity in the Israeli
stock exchange or in a foreign stock
exchange, and includes bonds issued
abroad by the Government of Israel,
in
addition,
as
stated,
to
CURRENT ACCOUNT
(89)
investments at less than one-tenth of
equity.
Financial
derivatives
instruments are also included here.
Other investment - This subgroup
includes remaining types of capital
flows such as loans from various
sources, deposits, suppliers’ credit,
and advance payments on account of
transactions.
Net reserve assets - Includes changes
in the assets and liabilities of the
central bank (not revalued).
include changes in obligations caused
by fluctuations in the exchange rate
of various currencies in relation to
the US dollar, while in the balance
tables
these
changes
were
not
included.
ASSETS IN FOREIGN
CURRENCY
(Table 15.6)
Foreign currency assets include those
held by financial institutions in
Israel, the Bank of Israel and the
General Accountant. The assets table
also
includes
estimates
of
the
balance of Israeli investments abroad
from 1994 and after. This item does
not include the value of real estate
purchased by Israelis abroad.
ISRAEL'S FOREIGN
LIABILITIES
(Table 15.5)
This table presents the obligations
of the economy to foreigners, whether
the
repayment
is
in
foreign
or
Israeli
currency.
The
liabilities
table includes the investments of
foreigners in Israel from 1994 and
after. This item does not include
real estate purchases in Israel.
Besides
the
distinction
between
liabilities by date of repayment, the
table
classifies
obligations
by
sector
of
the
debtor,
i.e.,
government,
private
or
banking
sector. These obligations are also
presented
according
to
date
of
repayment set down when the loan was
obtained.
A
short-term
loan
is
defined as one repayable within one
year; and a long-term loan is one
repayable within a period exceeding
one year.
Deposits of foreign banks in local
banks also include loans repayable
after more than one year. Due to lack
of data, these deposits cannot be
classified
according
to
date
of
repayment.
Liabilities of the economy include
bonds and shares issued by banks and
distributed directly abroad.
Total
foreign
liabilities
also
SOURCES
Data included in the balance of
payments are based on concentrated
reports of the Bank of Israel (data
of the Controller of Foreign Exchange
and the Superintendent of Banks) and
various government offices, as well
as on data received from factors
conducting economic transactions with
the rest of the world.
Because of
the heterogeneity of the reports
obtained from various bodies, and
delays in closing financial accounts
and balances, a preliminary estimate
of some items was prepared in order
to publish the report at regular
intervals. Consequently, balance of
payments data undergoes additional
processing, examination and revisions
after publication.
More
detailed
explanations
and
information on sources, methods and
definitions have been published in
the Special Series publications and
in
the
Current
Briefings
in
Statistics Series (see below).
SELECTED PUBLICATIONS
SPECIAL PUBLICATIONS
959
Israel's Balance of Payments 1952-1992
CURRENT BRIEFINGS IN STATISTICS
(90)
2, 2001
Israel’s Balance
September 2000
of
Payments,
January-
JUBILEE PUBLICATIONS
(on the occasion of Israel’s
50th year)
Balance of Payments (No. 5 in the series)
(91)