Sources inform ''Globes'' that Minister of Finance Yuval Steinitz and Manufacturers Association president Shraga Brosh met on Friday to discuss the future of the shekel-dollar exchange rate after the Bank of Israel ends its dollar purchasing program.
Brosh, who also serves as chairman of the Economic Organizations Liaison Committee, is very worried by the shekel's latest appreciation. In line with market expectations, Governor of the Bank of Israel Prof. Stanley Fischer is expected to soon end the central bank's dollar purchasing program, which he initiated in March 2008, 17 months ago.
The Bank of Israel has been buying an average of $100 million a day on weekdays and $50 million on Fridays. When the Bank of Israel first announced the program, it said that the objective was to boost Israel's foreign currency reserves from $28 billion to $40 billion. The foreign currency reserves reached more than $50 billion last month, which forced the Bank of Israel to admit the real purpose of the program was to support exporters by propping up the shekel-dollar exchange rate.
The Bank of Israel is already discussing its exit strategy for the program. Meanwhile, Brosh and Steinitz are discussing policy alternatives for the shekel-dollar exchange rate and exports after the Bank of Israel terminates its dollar purchases.
Published by Globes [online], Israel business news - www.globes-online.com - on August 2, 2009
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