A Communist motion to lower Israeli bank interests was voted down in the Knesset, Israel’s Parliament, here today after it had been opposed by Pinhas Sapir, Minister of Finance, Trade and Industry. Moshe Sneh, one of the Communist leaders, moved to have interest rates fixed by law at 7 per cent for agricultural loans and at 9 per cent for other purposes. The rate is now 11 per cent.
Mr. Sapir told the House that lowering the rates for borrowers would entail reduction of the interest rates paid to savers. The result, he said, would be to drive savers to withdraw their funds and spend the money on consumer goods. In fact, he held, Israel’s economy is expanding, and there is a heavy demand for capital, with the supply limited. Reduction of the interest rate “in an economy hungry for capital,” he declared, would only drive money into the black market, thus making credit more expensive for the very groups which Mr. Sneh professed he wanted to protect.
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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.
