"The decision taken by Bank of Israel to reduce interest rates by 0.7% merely pays lip service to the pressures place on the Governor of Bank of Israel," said Manufacturers Association director general Yoram Belizovsky.
"There is a need to lower interest rates by at least 3%, in order to halt the damage and stabilize the Israeli market," Belizovsky said.
In his estimation, signs of market slowdown, reduced productivity, lower exports and the capital market crisis require bolder measures.
Association of the Chambers of Commerce president Dan Gillerman called yesterday for the Prime Minister and Minister Finance to immediately nominate a Bank of Israel board of governors. Gillerman pointed out that the 0.7% reduction was not enough, and that the measures taken by Bank of Israel Governor Yaakov Frenkel was "a cynical step in defiance of the market, and damaging to the government which is responsible for the market situation." Gillerman added that the Governor had already adjusted interest rates 21 times over the past 25 months. "Bank of Israel’s zig-zag policy has already caused severe market damage."
"The status quo of budget cuts, high interest rates and revaluation or real shekel rates is the formula for recession," said Bank Hapoalim investment group Pe’ilim chairman Yoram Gabai today.
Gabai added that maintaining too-high real interest rates after the approval of budget cuts, had influenced the share market, and via that channel, the provident fund yield. In his estimation, this correction in interest rates should be executed shortly, not dragged out by half a year until budget cuts go into effect.