JERUSALEM (Jul. 8)
Monetary exports said today that Israel will not suffer because of the low state of the U.S. dollar on the European money market even though the Israeli pound continues to be pegged to the dollar. They said, however, that Israel will eventually feel the pinch of higher prices on imports from Europe.
Moshe Zanbar. Governor of the Bank of Israel said the sharp drop in value of the U.S. dollar did not affect Israel because most of its foreign currency reserves are in West German marks. Zanbar said that since Israel’s foreign debt is three times its foreign currency assets, the Bank secured itself by acquiring only “those currencies which up their value,” such as the Deutschmark. Zanbar said this did-not-mean the Bank of Israel was speculating, only that it is making sure it will be able to fulfill its future obligations.
The impact of higher European prices will not be felt on the Israeli market for at least another 45 days, experts said. The 90-day price freeze that went into effect last month requires a 45 day notice before a manufacturer can apply for a price hike here because of higher prices at his European source of supply.