"There is almost no disagreement that Israel has become a target for speculators who see the present weakness in the economy, and are placing orders for shekels without any fear of intervention by either the government or the Bank of Israel. A cautious estimate of the capital invested in the shekel is NIS 40 billion, which is causing the shekel to appreciate and causing irreversible harm to the economy," says Israel Association of Electronics and Software Industries chairman Elisha Yanay in an urgent plea to Prime Minister Benjamin Netanyahu, Minister of Finance Yair Lapid, and Minister of the Economy Naftali Bennett to intervene immediately to stem the appreciation of the shekel against the dollar.
Yanay fears that the continuing strengthening of the shekel against the dollar will raise the operating costs of multinationals in Israel. "70% of high-tech exports are in dollar-linked contracts, and most multinationals operating in Israel are based in the US. The operating costs of these companies are nearing, and even exceeding the operating costs of these companies in the US," warns Yanay.
"National attention is directed to natural gas, but even if gas is exported, it will contribute $2-3 billion to the economy, compared with $25 billion that high tech contributes. While the gas industry employs a few thousand workers, high tech employs hundreds of thousands of people, and their cost is rising and rising without letup because of the appreciation of the shekel. This is at a time when the profit margins in this industry are falling to point of harming its ability to compete in the wider world and in its target markets."
Yanay slammed the government and the Bank of Israel for the situation, claiming that they are not trying to prevent the appreciation of the shekel. "Not only are the government and the Bank of Israel doing nothing, they are openly publishing information about future intentions for the interest rate and dollar purchases by the Bank of Israel, which facilitates the work of the speculators. The government and the Bank of Israel should take up the reins and launch a total war to weaken the shekel against the dollar, like large countries and economies that are stronger than Israel, like Switzerland, Japan, and Brazil, which acted successfully," he claims.
Published by Globes [online], Israel business news - www.globes-online.com - on August 13, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013