“I emphasize that this is a safety net and not a concrete floor. It was not designed to reverse the trend but rather to provide investors confidence that there wouldn’t be too steep a descent,” said Professor Ya’akov Frenkel, Governor of the Bank of Israel today.
Reacting to the sharp fall posted today on the TASE, Frenkel said that government bonds posted something of a turnaround, and that was the objective behind the steps.
President of the Manufacturers Association Dan Propper, on the other hand, said today at a conference in Caesarea: “I don’t believe in safety nets, I believe in genuine solutions.”
According to Propper, the safety net decided on is like a finger in a dike, a temporary measure good for an hour, at best a day. “Controlled monetary policy is the solution and the sooner the better,” he said.
The balance of payments, said Propper, is like a time bomb about to explode any second. “It’s improbably to relentlessly attack inflation by raising the interest rate and to cause further worsening of the balance of payments by this stubborn policy,” he added.