Lapid drawing up export support package

A business organization official said they "seemed just more of the same such as increasing government guarantees."

Sources inform ''Globes'' that Minister of Finance Yair Lapid and ministry officials are drawing up a package of export support measures, which will be announced within days. The Ministry of Finance said that top ministry officials had met with officials from business and export organizations. The ministry did not mention the topic at the center of attention: the shekel-dollar exchange rate, which continues to fall.

The business organizations welcomed the measures, but an official said they "seemed just more of the same, such as increasing government guarantees for exports," and added that immediate remedies were needed, including measures to boost the shekel-dollar exchange rate to NIS 3.80/$.

Sources at both the Ministry of Finance and the business organization note Lapid's excellent relations with manufacturers, in contrast to the relations of his predecessors, Yuval Steinitz and Ronnie Bar-On. Exporters also mention their deep disappointment with Governor of the Bank of Israel Dr. Karnit Flug.

Earlier this week, top Ministry of Finance and Bank of Israel officials held a special meeting to draw up joint measures on the exchange rate. The Bank of Israel officials took a conservative position, saying the interventions in the foreign currency market, the debt hedging, and the cancellation of the tax exemption on foreign residents' profits on government bonds, were sufficient. The Ministry of Finance says that the exemption makes no material difference to the exchange rate and that it is an ineffective measure.

It is not clear whether the Ministry of Finance will take action on the exchange rate, or the extent that it can be active in this area, since, formally, it is the responsibility of the Bank of Israel.

The sources said that there is no majority among Ministry of Finance officials for setting an exchange rate floor, after a thorough study of the subject by ministry director general Yael Andoran.

Published by Globes [online], Israel business news - www.globes-online.com - on January 9, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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