Pound Devalued Again

The Israel Pound was reduced in value by two percent last night and now stands at IL 7.97 to the dollar compared to the previous exchange rate of IL 7.82-$1. Despite mounting criticism of the so called “creeping devaluation.” the Treasury said today that it would continue the policy aimed at reducing imports and increasing exports. Last night’s devaluation was the tenth since June 1975. when the ministerial finance committee was first empowered to devalue the Pound at the rate of up to 2 percent every 30 days if considered necessary.

The Treasury said the latest devaluation would not result in increased prices for basic commodities which are subsidized by the government. Economists did not expect an immediate rise in the prices of imported goods. But their evaluation provided little consolation for Israeli consumers who face a minimum increase of 5 percent in the cost of living when the new value added tax (VAT) goes into effect July 1.