Governor of the Bank of Israel Prof. Stanley Fischer has told the "Wall Street Journal" that the Israeli economy "is doing very well." The Bank of Israel recently raised its 2011 growth forecast from 3.8% to 4.5% and Fischer said he wouldn't be surprised if "we grew faster than that" in the first quarter.
A large part of the interview was devoted to foreign exchange rates and Fischer told the newspaper that, "The bank hopes the need for intervention in foreign exchange markets will be minimal," He added that, "It is prepared to intervene if the shekel's value isn't appropriate."
In the interview, "Fischer acknowledged the bank's willingness to accept a stronger shekel, pointing to interest rate hikes earlier this year and to the currency's recent rise."
Fischer declined to comment on the US Federal Reserve's quantitative easing program and said, "I'm sure when interest rate relationships return to normal, which is not going to happen overnight, then because of capital flows, exchange rates will adjust."
Although Fischer was upbeat on the Israeli economy, he admitted that regional uncertainties cast a cloud over the future. He said, "It's a promising outlook, but we know we live in an uncertain world so you have to stay on your guard all the time. There is a lot more uncertainty than there used to be.We've got to be prepared for a greater variety of scenarios."
Published by Globes, Israel business news - www.globes-online.com - on May 1, 2011
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