The government announced tonight a two percent devaluation of the Israel Pound, the second devaluation since last fall when the Pound was reduced in value by nearly 42 percent. It now stands at IL 6.12 to $1 compared to the previous IL 6.
The announcement was made after a special Cabinet meeting which heard Premier Yitzhak Rabin’s report on his trip to the U.S. and discussed economic matters. The Cabinet also empowered the Finance Minister and the Governor of the Bank of Israel to announce additional devaluations of two percent at any time provided that 30 days have elapsed since the previous devaluation. The devaluation announcement confirmed rumors current here throughout the day that the Pound was about to undergo a further depreciation. It was, in effect, an implementation of a recommendation by Moshe Sanbar, Governor of the Bank of Israel. Sanbar, however, had also proposed that the Pound be permitted to “float” against all major currencies.
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