web analytics
February 1, 2015 / 12 Shevat, 5775
 
At a Glance
News & Views
Sponsored Post


Fischer Cuts Interest Rate and Says Bank to Buy 2 Billion Dollars

Cash transactions may be severely limited by this time next year, if the Prime Minister's Office has its way.

Cash transactions may be severely limited by this time next year, if the Prime Minister's Office has its way.
Photo Credit: Abir Sultan Flash 90

Bank of Israel Governor Stanley Fischer announced on Monday a surprise cut the prime interest rate as part of his battle to fight the appreciation of the shekel and help the economy to keep growing. The financial markets responded with the shekel-dollar rate rising more than 1.5 percent to the level of 3.61 shekels to the dollar.

Fischer announced the interest rate cut two weeks ahead of the usual end-of-the-month decision on whether to change the rate.

The dollar was worth only 3.55 shekels last week, dropping over the past several weeks from the relatively lofty level of 3.8 shekels to the dollar.

A lower shekel-dollar rate hurts exports because foreign buyers have to pay relatively more dollars than they would when the shekel is worth less. In addition, exporters make less money after converting foreign dollars into shekels.

Factors in the lower rate are the anticipation of tax revenue from Israel’s natural gas bonanza, which came on-stream several weeks ago, Warren Buffet’s $2 billion purchase of the remaining shares of the Israel-based Isracar tool-making company, the possibility of a $1 billion buyout of Waze by Facebook, and the relatively stable Israeli economy.

Fischer cut the rate by a quarter of a percent, with the new 1.5 percent rate making the shekel less attractive to foreign investors.

After the Bank of Israel’s two small purchases of dollars the past three weeks in an effort to keep speculators from forcing the shekel-dollar rate any lower, Fischer announced on Monday a massive dollar-buying plan on the scale of his purchases several years ago when the shekel-dollar rate sank to 3.30.

The Bank of Israel said the decisions to lower the rate and buy dollars was made “in light of the continued appreciation of the shekel, taking into account the start of natural gas production from the Tamar gas field, interest rate reductions by many central banks – notably the European Central Bank, the quantitative easing in major economies worldwide and the downward revision in global growth forecasts.”

The Bank of Israel added that global growth forecasts, especially for Europe and China have been revised downward, which effect Israel’s economy.

It explained that the program to buy dollars takes into account “the effects on the financial account resulting from the natural gas production” that will result in foreign exchange payments by the gas companies.

“As in the past, the Bank of Israel will continue to operate in the foreign exchange market in cases of exchange rate fluctuations which are not in line with fundamental economic conditions, or when conditions in the foreign exchange market are disorderly,” the Bank of Israel added.

About the Author: Tzvi Ben Gedalyahu is a graduate in journalism and economics from The George Washington University. He has worked as a cub reporter in rural Virginia and as senior copy editor for major Canadian metropolitan dailies. Tzvi wrote for Arutz Sheva for several years before joining the Jewish Press.


If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

No Responses to “Fischer Cuts Interest Rate and Says Bank to Buy 2 Billion Dollars”

Comments are closed.

SocialTwist Tell-a-Friend

Current Top Story
Jeremy Bird, working for Israeli campaign outfit V15, shown at Ted Talk, May 20, 2014.
Likud Charges Opponents with Illicit Funding Through US-backed V15
Latest News Stories
Jeremy Bird, working for Israeli campaign outfit V15, shown at Ted Talk, May 20, 2014.

Likud party members charge opponents with receiving illicit funds and violating Israeli election laws.

Peres Bust

A bust depicting former Israeli president Shimon Peres was placed next to sculptures of the former eight presidents in the garden of the President’s residence in Jerusalem, on February 01, 2015.

Arab attackers smashed these windows on an Egged bus in Jerusalem's Old City.

An IDF soldier is lightly wounded and an Egged bus damaged in an Arab rock attack in Jerusalem’s Old City.

A Krav Maga class for teachers in Efrat

Nursery and kindergarten teachers in Efrat learn self-defense techniques but hope they won’t need them.

The Prime Minister has declared Orbach temporarily absent from the Knesset for medical reasons.

Avigdor Liberman finally declared his political allegiances without the semantic games and ambiguity.

Another Israeli Arab falls into the ISIS trap, runs off to Syria and then comes home to be arrested.

Anti-Semitism is alive and well — and thriving — in London. It will get a boost on March 22, 2015.

Many families enjoy watching the Super Bowl together, but the halftime show makes them uncomfortable. This is a family friendly entertainment venue that can be enjoyed by everyone.

Fatah are big talkers, but you don’t see Arabs in the Palestinian Authority going without their Israeli products.

Carl Djerassi’s research led to the invention of oral birth control pills.

The US promptly condemned the “vicious” beheading of Japanese journalist Kenji Goto on Saturday, noting its “own experience” with “this pain.”

The Washington Post reports the CIA and Mossad collaborated on the 2007 murder in Damascus of the Hezbollah terror group’s No. 2 leader.

ISIS released a video showing the beheading of Japanese hostage Kenji Goto.

PM Binyamin Netanyahu says it’s easier to deal with a procedural problem than resolving a nuclear threat.

An IDF force killed an Arab terrorist attacking motorists Saturday night near Yitzhar in Samaria.

More Articles from Tzvi Ben-Gedalyahu
Children learn how to shoot rifles to kill Jews.

Maybe, just maybe, the new generation of terrorists will one day turn their guns on their oppressors in Gaza.

You are looking at an "armed insurgent" and not a terrorist, according to the White House.

The White House explains that Taliban is not a terrorist group — it is an “armed insurgency.”

The US in November stopped funding a left-wing group that is helping to campaign against Netanyahu

Super Bowl viewers will have to get along with Scarlett Johansson this year.

Cruz and New York Rep. Zeldin complained to Kerry of Obama’s “relentless harassment.”

National religious voters favoring the new Yachad party headed by Eli Yishai may be wasting their votes.

Hezbollah is a terrorist group and terrorist party, but most and worst of all, it is a huge and powerful army.

Lieberman’s issues a disproportionate response to polls that show his party will barely squeeze into the Knesset.

Printed from: http://www.jewishpress.com/news/fischer-cuts-interest-rate-and-says-bank-to-buy-2-billion-dollars/2013/05/13/

Scan this QR code to visit this page online: