"The government complains day and night over the cost of living in Israel, but it is responsible for most of the price hikes in the economy and the damage to exporters' competitiveness," said Manufacturers Association of Israel CEO Amir Hayek in a new call today to take action against the strong shekel, which is severely hurting exporters.
"The Manufacturers Association is coordinating activity with two agencies that are not working together: the Ministry of Finance and the Bank of Israel. Happily, the finance minister understands the difficulty that the low shekel-dollar exchange rate causes exporters, and is preparing a plan to help us, but the Bank of Israel is acting completely differently. Regrettably, Governor Karnit Flug recently said that the low shekel-dollar exchange rate does not affect exporters, but I wish to tell her that she is badly wrong - it hurts and harms us," continued Hayek, at a special Association conference for CFO of large manufacturers.
"Although exporters see light at the end of the tunnel, hope that things will be all right, and won't forego any deal, they will break at some point, and we're very close to that point, the point of no return at which we will have no profit. That is why the Bank of Israel should and must act to block foreign currency market speculators and not to let the low shekel-dollar exchange rate continue to hurt us.
"We're talking about a daily struggle by exporters and enterprises, which constantly have to decide how to manager to maintain a marginal profit and how to avoid mistakes. I feel the pain of each and every one of you. This is a difficult time for us all."
Hayek concluded, "In addition to the low shekel-dollar exchange rate, manufacturers must also deal with rising costs. On January 1, we were hit by the arnona (local property tax) fine, regardless of its excessive hike. We also finance the municipal water companies - all 52 of them - and the constantly rising electricity rates. At some point the manufacturers will break."
Published by Globes [online], Israel business news - www.globes-online.com - on January 23, 2014
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