The Shekel completes one year in the CLS system

26.05.2009
 
The Shekel completes one year in the CLS system
 
In its first year as an eligible currency in CLS Bank the average daily volume of Israel Shekel foreign currency transactions was NIS 17.75 billion ($4.8b). The highest volume in a single day was NIS 39 b ($10.6b). 38 CLS Member banks are active in shekel settlement.
CLS Bank is an international consortium bank established to reduce settlement risk in foreign exchange transactions and international payments. Daily average foreign exchange transactions cleared via CLS reached USD 3.3 trillion in 2008, with a peak daily value of over USD 10 trillion.
CLS operates only between financial institutions; however the efficiencies and risk reduction it provides benefits all market participants. The customer of a bank can be assured that his foreign exchange transactions will not be subject to settlement risk, and a more efficient system reduces overall costs. Moreover, the entry of the Shekel into the system has brought the Israeli consumer additional benefits, such as easier access to internet and e-commerce payments in shekels, and the ability to chose shekel payments when using a credit card abroad.
The Shekel was accepted as an eligible currency and entered the system in May 2008,
following the successful completion of a multi year project led by the Bank of Israel. It became one of 17 leading currencies (which comprise 95% of total global volume) for which FX transactions can be settled on a global risk free basis. CLS has 59 Member banks and 4,700 participants.
The inclusion of the shekel in CLS was recognition of the standing of the Israeli economy as well as the stability and efficiency of the banking and payment systems in Israel. It also improves the financial infrastructure of Israel, reducing risk and increasing efficiency, especially important in view of the financial crisis of the recent past. The BOI notes that the FX market in Israel has continued to operate smoothly and efficiently during the period, a sign of the underlying resilience of Israel’s economy and the stability of Israel's financial system.