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Bank of Israel boosts dollar reserves

The Bank of Israel boosts dollar reserves to $41 billion. This is an odd move, as the crisis has cut into the US dollarís value. But Bank of Israel is intertested in artificially pushing the shekel down so as to benefit ultra-rich Israeli exporters. A weak shekel means higher prices for Israeli consumers, but who cares.

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“Weak shekels means higher prices for Israeli consumers, but who cares.”

You are TOTALLY wrong – weak shekels means more profit for Israel’s monopolistic importers

Between summer ‘07 and summer ‘08, when the NIS rocketed from 4.2 NIS / $ to 3.2 NIS/ $, the car importers didn’t lower the prices AT ALL and kept the $$ to themselves. Meanwhile, the gov’t blocks parallel import, and forces us to be “hostages” of the monopolistic importers.

On the other hand, the strong NIS devastates Israel’s hi tech industry, and Israel’s tourist industy, as it makes Israeli products and services expensive to purchase. In an export-oriented economy like Israel’s (unlike the USA which is MUCH less export-oriented), a strong currency is a disaster and a recipe for unemploymnt

anonymous BeitShemesh 06 January 2009

Strong shekel of 3.2/dollar – for every dollar of imports, local price exceeds 3.2shk.
Weak shekel of 3.9/dollar – the same imports are priced at 3.9shk, more expensively, thus bad for imports.

admin 06 January 2009

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