Stepped-up Buying, but No Panic, Continues in Wake of Devaluation

Banks throughout Israel were reopened today after being closed yesterday, the first full day of the devaluation of Israel’s pound. Long lines were seen at the banks but there appeared to be no panic withdrawals, observers reported. Stepped-up buying continued in stores selling imported products, appliances and even such staples as sugar and oil. Some observers suggested that consumers were continuing to buy even though posted prices on all products reflected the changes brought by devaluation, because of fears of further devaluation. Economic experts said that the upsurge in buying had been taken into account in the planning by Finance Ministry officials for devaluation and events stemming from it. The special government committee on prices approved increases in prices charged by the two top grades of hotels in Israel. The effect will be that overseas tourists will pay in their currency about the same amounts as before devaluation but Israelis staying in those hotels will pay more.

Medium and low-priced hotels have not been allowed to increase their rates but the government is trimming the premium they had previously been given for every dollar they turned over to the treasury. New air fares were posted, effective at midnight last night. People leaving Israel before midnight were allowed to go on their pre-devaluation tickets without paying the 20 percent difference but those leaving after midnight had to pay it. (In Paris, travel agents told the Jewish Telegraphic Agency that though the devaluation measures will most probably potentially increase the number of tourists to Israel “such an increase is not practically feasible due to the shortage of hotel accommodation.” The travel agents said that even before the devaluation they were unable to satisfy all requests and that the thousands of European would-be tourists had to be turned down due to a shortage of hotel rooms. A spokesman for one of the largest travel agencies in Europe said “that luckily, the devaluation was decreed towards the end of the tourist season as otherwise we would have to turn down an even larger number of would-be visitors.”)