The Israel Pound was devalued by 1.9 percent at midnight last night, the second devaluation in five weeks. The ratio of the Pound to the U.S. dollar is now IL 6.36-$1, up from IL 6.24-$1, but neither the banking community nor the public appeared to be disturbed by the new depreciation of the national currency.
The government promptly issued assurances that it will keep prices at their present levels for essential commodities and utilities such as fuel and electricity. As a result there was no buying stampede to stock up on goods.
The only consumers directly affected by the devaluation are those going abroad and purchasers of 1976 model cars. The price of airline tickets rose as a result of the new exchange rate and the higher travel tax. Beginning tomorrow, airline ticket holders who bought their tickets in advance under the old prices will have to pay the difference.
A special ministerial committee was empowered early this year to devalue the Pound at a rate of up to 2 percent automatically every 30 days if deemed necessary in the interests of Israel’s economy. The devaluation announced at midnight, therefore, was not unanticipated. The main intent of the devaluation is to ease the balance of payments deficit, reduce imports, stimulate exports and discourage Israelis from travelling abroad in order to preserve the nation’s dwindling foreign currency reserves.
JTA has documented Jewish history in real-time for over a century. Keep our journalism strong by joining us in supporting independent, award-winning reporting.
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.
