A senior Israeli banking source has called for an investigation as to whether HSBC had improper motives, when its analysts issued a forecast last Thursday, that turned out to be false, that the Bank of Israel would launch a quantitative easing program and lower the interest rate today by 0.2%.
The HSBC forecast included an estimate that the Bank of Israel would purchase government bonds worth between NIS 27 and 72 billion and caused a storm in Israel's foreign exchange and government bond markets and a sharp depreciation against the dollar and the euro, and the effective exchange rate.
Eventually, the Bank of Israel's Monetary Committee decided today to leave the interest rate for April unchanged and made no suggestion about launching a quantitative easing program. Consequently the shekel depreciation and rise in bond prices are expected to be reversed - strengthening the suspicion of a serious manipulation of the foreign exchange and bond markets.
The senior banking source told "Globes" this evening that HSBC's forecast aroused major discomfort for Israel's banking system, especially in light of the exceptional use of very precise numerical data - a formulation that reinforced the misleading impression by the HSBC analysts that inside information from the Bank of Israel's Monetary Committee's discussions had been leaked. The senior banking source said, "The report was not written as an estimate as is usual in such reports but rather as if it were a news item."
HSBC's report was written by analyst Murat Toprak, a senior foreign currency strategist operating in London who covers the Middle East including Israel and Turkey. HSBC has a representation in Israel under the authority of the Bank of Israel Supervisor of Banks and Israel Securities Authority. But as far as is known, there is no Israeli oversight on activities carried out abroad by HSBC's analysts department.
Published by Globes [online], Israel business news - www.globes-online.com - on March 23, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015