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Foreign Currency Fund Raising Goals
In addition to its domestic funding, the State of Israel raises capital in foreign currency on international markets. Funding is carried out abroad both directly by the government and through the Israel Bonds Organization. The volume of the government's foreign currency funding is determined by its foreign currency needs in order to finance its expenses abroad, by the need to roll over existing debt that reaches maturity, by the volume of foreign currency reserves at the Bank of Israel,and by the size of the external debt. Foreign Currency Fund Raising Goals The main goals that the Government achieves in its foreign currency fund-raising activity are: Financing the state budget and rollover of existing debt - the capital raised abroad is used to finance the government's budget deficit and finance the redemption of existing maturing debt. In this sense, it is an alternative to domestic fund raising. Opening global capital markets to the Israeli private sector - the presence of the Israeli government in global capital markets exposes the Israeli economy to these markets and paves the way for Israeli companies that wish to raise capital abroad. Israeli government bonds are used as benchmarks for the pricing of Israeli corporate debt. Moreover, the coverage of the Israeli economy by rating-agencies provides the market with more information about the economic environment in which those companies operate. Facilitating debt management - the government's ability to raise money abroad allows it to manage its debt more dynamically and to improve its debt structure in order to reduce costs and related risks. |
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