Minister of Finance Moshe Kahlon has given unconditional support to the foreign currency purchasing policy of the Bank of Israel. Speaking in Jerusalem this morning to senior officials of the Bank of Israel, Kahlon described the bank's foreign currency purchases as "A main instrument for supporting exports, industry and maintaining employment. There is a direct connection between the policy of purchasing foreign currency and the low-point in unemployment that we have in the economy. The measures taken by the Bank of Israel strengthen exports and I support them."
Kahlon said that Israel's exports rest on four companies - Iscar, Intel, Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) and Israel Chemicals (TASE: ICL: NYSE: ICL) as well as the defense companies. Kahlon said that the fall in exports at Teva is a "technical matter" and at Intel 'temporary."
Asked about the price target program, which the Bank of Israel has recently criticized, he said that he believed that its impact on real estate prices would grow as the program expanded and would be of financial assistance for tens of thousands of young couples.
On the topic of senior executives pay in the financial system, he was asked why legislation was also aimed at past entitlements. "As I've said previously," he responded, "There is no intention to harm past rights but only those today and in the future."
Netanyahu remains silent
Kahlon's words on the policy of purchasing foreign currency are a first response to National Economic Council head Prof. Avi Simhon's call for the Bank of Israel to stop the foreign currency purchases after the reserves have cross the $90 billion threshold. At the heart of the dispute, which broke out in last week's cabinet meeting as revealed by "Globes," is Simhon's belief that although a halt in foreign currency purchases would hit industry and exports and cost 20,000 jobs, those employees would be taken in by the services industry.
Histadrut (General Federation of Labor in Israel) chief Avi Nissenkorn strongly attacked Simhon's statement, which he said was "shocking" and called on Prime Minister Benjamin Netanyahu to distance himself from the words spoken by his close associate.
Published by Globes [online], Israel business news - www.globes-online.com - on June 6, 2016
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