Governor of the Bank of Israel Prof. Stanley Fischer today declared, "We're examining further interest rate cuts." The announcement contrasts with the message implied in last month's interest rate decision that no new interest rate cuts were likely for the time being. He made the comment at today's Atnachta Conference in Jerusalem.
Fischer added, "We must work fully with the Ministry of Finance to formulate economic policy. It's important to remember that we have one patient, the economy, and we're not two different doctors each offering his own medicine without coordinating with the other. We will coordinate and continue to work together. I hope that we will win."
Speaking directly to Shas chairman and Minister of Industry, Trade and Labor Eli Yishai, who was in the audience with other party leaders, Fischer said, "I've dealt with ten global crises. The most important thing is not to panic and not to make illogical populist measures. That's important for us, for the Ministry of Finance, and for the Ministry of Industry."
Fischer praised the Ministry of Finance's policies, saying that the measures included in the stimulus plan would help the economy. He could not help himself, however, from responding to Ministry of Finance criticism of him by hinting that he wants to amend the budget priorities.
Fischer said, "The government is very constrained, and is barely capable of changing its priorities without an approved budget. This will continue until a new government passes a budget. Then we'll see changes in the government's budget items and priorities in view of the current crisis. This is what I assume and what I hope."
Fischer added that this was the first time in Israeli history that the country was facing a crisis not of it own creation and did nothing to bring about. "What happened on the New York Stock Exchange yesterday, the worst drop in 15 years, affects us immediately. It is reflected in the growth rate, which fell to between 0.5% and 1% in the previous quarter."
Published by Globes [online], Israel business news - www.globes-online.com - on March 3, 2009
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