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Photo: Aharon Krohn/TPS
200 Shekel bills
Photo: Aharon Krohn/TPS

Manufacturers warn rise in shekel threatens to wipe out Israeli exports

President of the Manufacturers Association of Israel warns that the rampant rise in the value of the shekel could seriously hurt exports if left unchecked, says Israel already lost $1.3 billion in exports since the beginning of 2016.

Israel has lost $1.3 billion in exports since the beginning of 2016 as a result of the rise in the value of the shekel, and exports could be wiped out all together, Shraga Brosh, president of the Manufacturers Association of Israel warned at an emergency session of the Knesset Finance Committee Tuesday.

 

 

“Before manufacturers get used to the weak dollar, the state will have to get by without industry,” Brosh told the committee. “The weak dollar and euro present an imminent danger to thousands of factories and tens of thousands of workers who are employed in industry, as exchange rates are a crucial factor in the competitiveness of Israeli industry.”

 

Photo: Aharon Krohn/TPS (Photo: Aharon Krohn/TPS)
Photo: Aharon Krohn/TPS

 

The shekel has strengthened to NIS 3.53 to the dollar, compared with NIS 3.9 at the start of 2016, and NIS 3.95 to the euro, compared with NIS 4.25. This year alone, the shekel has gained over 15 percent against the basket of currencies.

 

The Bank of Israel has aggressively purchased foreign currency in an attempt to stem the surge in the shekel, leading foreign currency reserves to soar to a record $107 billion, following purchases of some $5 billion since January.

 

Not everyone agrees with the BOI policy. The former director of the BOI’s foreign currency department, Barry Topf, recently criticized the decision to pad the foreign currency reserve, saying that buying dollars was no more than a subsidy for inefficient exporters and that the policy should be reevaluated.

 

However, Brosh praised the BOI’s efforts, saying, “To the BOI’s credit, it is doing its best. Unfortunately that is something that cannot be said for the government.”

 

Article reprinted with permission from TPS .

 


פרסום ראשון: 06.15.17, 16:54
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