The Cabinet decision to devaluate the Israel pound came under heavy fire in a Knesset debate here last night by members who voiced fear of a serious rise in prices despite Finance Minister Pinhas Sapir’s assurances yesterday that price rises, if any, would be negligible.
Leading the attack were members of coalition parties including Z. Tsur of the Alignment (Mapai and Achdut Avodah); Dr. I. Ben Meir, of the National Religious Party; V. Shem-Tov of Mapam; Dr. J. Bader of Gahal (Herut and Liberal party fusion); and A. Degani of Rafi. The immediate object of concern was the price of such basic food commodities as milk and eggs which depends on yearly imports of fodder from the United States amounting to $40 million.
The critics said that the government will not be able to prevent a price rise and that wage earners will suffer. The Cabinet is expected to rule this week on the price of milk and eggs which is expected to go up 15 percent unless subsidized. Meanwhile it was learned that Jordan had decided not to devalue the dinar which is linked to the pound sterling and which is legal tender in the occupied West Bank area. The Israeli pound now stands at 9.80 to the dinar instead of the previous 8.40 which is also the ratio of the Israel pound to the pound sterling.
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