Manufacturers are worried about the slide in the shekel-dollar exchange rate, which fell to NIS 3.72/$ in inter-bank trading today, after a 6.5% drop in two months. They worry that the strengthening of the shekel against the dollar and euro will reduce export profits, and they called on Governor of the Bank of Israel Prof. Stanley Fischer to take immediate steps to stem the slide in the exchange rates.
"The governor should intervene immediately in the shekel-dollar exchange rate, which until now was a light at the end of the tunnel for industry, but is now dimming. When we get fewer shekels for each export deal, while manufacturers' expenses in shekels are rising, such as water, electricity, National Insurance, and arnona (local property tax), manufacturers' profits are wiped out," Manufacturers Association of Israel president Zvi Oren told "Globes" today. "We're talking about a dangerous situation for the economy. If export profits continue to erode, the government's deficit will grow."
The Bank of Israel declined to comment on the report.
In the past, when the shekel-dollar exchange rate fell sharply, Fischer instituted a policy of buying dollars by the Bank of Israel in an attempt to rein in the strengthening of the shekel. Manufacturers are now calling on him to again apply this policy in an effort to stabilize the shekel-dollar exchange rate at around NIS 4/$.
Ministry of Industry, Trade and Labor director general Sharon Kedmi today discussed the 2013 budget with the heads of the Manufacturers Association. He expressed concern that the country may operate without an approved budget for at least the next six months, and said that the next budget would require a package deal between the government, employers, and the Histadrut (General Federation of Labor in Israel).
"A package deal will minimize harm, and let the economy move forward. The budget that will be approved after the elections will be very challenging, and will require national responsibility and cooperation by all the parties," Kedmi said.
Manufacturers Association president Amir Hayek said that the Ministry of Industry had not stood with the manufacturers when wide-ranging environmental legislation was passed, which hurt manufacturers, nor when arnona and water rates were raised. "The Ministry of Industry does not fight the fights of manufacturers," he said.
Published by Globes [online], Israel business news - www.globes-online.com - on December 27, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012