Sapir: No Plans to Devaluate Pound; Fear of Devaluation Spurs Sales

Finance Minister Pinhas Sapir said last night he did not plan to propose any devaluation of the pound in the wake of President Nixon’s wide-ranging changes in United States fiscal and trade policies. He made the statement to the Ministerial Committee on Economics. But some sources reported that a definite decision on devaluation would be taken at a later date, possibly in a few weeks, after the impact of the Nikon economic moves on world monetary markets could be more accurately assessed. In the meantime, foreign currency transactions were restricted to dollars for the third day. Uncertainty over the future of the Israeli pound caused a jump yesterday in the ratio of the dollar in the free market to more than four pounds as against the three-and-a-half pound official rate. But by this morning, the dollar had dropped and was trading at just under four pounds. But fears of devaluation spurred purchases of securities on the Tel Aviv stock exchange and a rush to buy such appliances as refrigerators and washing machines by Israelis seeking to protect the value of their pounds. However, merchants said that delivery of such purchases would be in accordance with new pound rates if any changes took place before delivery. Officials stressed that while such buying was heavier than normal, it did not reach anything resembling panic buying. An emergency meeting on the effects of the Nixon measures was held today at the Export Institution offices in Tel Aviv. Speakers observed that it will be the exporters who will have to absorb the bulk of the increase in customs duties.