Israel to Fix New Dollar-pound Rate; Hopes for New U.S. Grant

The Israel Government will fix a new value on the Israeli pound in relation to the dollar sometime next week-end, Ehud Avriel, director-general of the Premier’s office, announced here today.

Mr. Avriel, who is the Israeli coordinator for American mutual security aid to Israel, revealed that Israeli Finance Minister Eliezer Kaplan and Bruce McDaniel, American coordinator of U.S. technical assistance, will confer next week-end on an agreement for the allocation of the remaining $40,000,000 of American grants in aid. Mr. Avriel, who paid high tribute to Mr. McDaniel for his cooperative attitude, told a press conference that Israel has already spent some $26,000,000 in U.S. aid allocated in the past two months.

The Israeli official also disclosed that of the approximately $65,000,000 allocated by the U.S. Congress for Israeli needs, $17,000,000 will be spent for food; $17,000,000 for agricultural development; $5,300,000 for electrical equipment; $9,300,000 for fuel; $7,000,000 for raw materials; $3,000,000 for housing; and over $2,000,000 for communications equipment and development. He expressed the hope that a further grant will be made by the U.S. Government.

The local press, meanwhile, has reported that the Cabinet is contemplating a series of moves aimed at improving the country’s economic situation. Among them are: the establishment of a priority system for foreign currency allotments; an increase in indirect taxes, particularly a luxury tax; the floating of a compulsory internal bond issue; and the introduction of further credit restrictions for banks, thus forcing them to invest more funds in government securities. Also, the newspapers speculate that the government will introduce three different exchange rates to adjust the pound’s purchasing power, and will freeze wages and profits.