Senior Israeli finance and banking officials indicated today that it would be days and perhaps weeks before Israel could determine what steps it should take in response to the sweeping new domestic and international economic policies announced by President Nixon. One key question before the officials was understood to be that of determining whether to let the Israeli pound fluctuate with the American dollar at the present official rate of exchange of three-and-a-half pounds to the dollar or devalue the pound. That action, it was suggested, could increase Israel’s prospects for greater exports. Those and related questions were being intensively studied by officials of the Finance Ministry and of the Bank of Israel, the nation’s central reserve bank, in consultations which have been proceeding without letup since Nixon announced the new economic “game plan” Sunday night. Strong objection to the devaluation idea was registered today by Mare Moshevitz, president of the Israel Manufacturers Association. He said devaluation would cause unemployment and make import goods far more expensive, perhaps producing a crisis mood which would be inimical to a country like Israel which is eager to attract investors.
Moshevitz suggested, instead, such fiscal measures as selective import taxation, export incentives and higher purchase taxes. For the second day, trade in foreign currency, other than in dollars, was banned. Special arrangements were made for tourists at Lydda Airport and other points of entry to convert reasonable amounts of other currencies into pounds or of reconverting currency exchanged by tourists for pounds when they entered Israel. The “black market” dollar in Tel Aviv rose today to 4.05 Israel pounds as speculators gambled on the possibility of devaluation of the pound. That rate was nearly a record. For the past year, the rate has fluctuated around 3.8 pounds and once reached a low of 3.65 pounds. Trading in dollar-linked shares on the Tel Aviv exchange was halted today after a hectic period in which only buyers were in the market. Meanwhile, Moshe Zandberg, the Governor-Designate of the Bank of Israel, was recalled “urgently” from a mission abroad to join in the talks with the present Governor. David Horowitz and his staff.
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The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
