Olmert to hold emergency meeting on dollar rates

Prime Minister Ehud Olmert is expected to hold an emergency meeting concerning the recent fluctuations the dollar rates, Yedioth Ahronoth reported Thursday.

Olmert has summoned Finance Minister Ronnie Bar-On, Industry, Trade and Labor Minister Eli Yishai, Governor of the Bank of Israel Stanley Fischer and several other Finance Ministry officials to the meeting, which is the first of its kind in years.

The emergency meeting was called after falling dollar rates – which have lost 15% in the last three months – have prompted industry heads to declare layoffs are imminent. Ofer Eini, Chairman of the Histadrut Labor Federation, has also announced that unless the government intervenes in the situation, he may declare a general strike.

Should the Federal Reserve decide to lower US interest rates, as many believe it would, dollar rate are expected to suffer another slump, possibly reaching NIS 3.5 and under – the currency's lowest exchange rate in 12 years.

Industry heads demand the Bank of Israel lower interest rate immediately, prompting a rise in dollar rates, but Fischer is said to be stalling, fearing it may cause an inflation spike.

Alternatively, Yishai, along with President of the Manufacturers Association of Israel Shraga Brosh, demand the Finance Ministry take immediate action in order to assist Israel's exporting industries, which are mostly dollar-based; and have suffered significant losses due to its plummeting rates.

Olmert is also expected to consult Prof. Manuel Trajtenberg, head of the National Economic Council, as to the countermeasures needed in order to avoid any damage to local industries. The prime minister, however, is not expected to exercise his authority to order Fischer to lower interest rates.