Governor of the Bank of Israel Prof. Stanley Fischer said that "The Bank of Israel will defend Israel's economy from a global slowdown". He made his comments at a special press conference at 11:30 this morning. At the previously unannounced meeting, the central bank governor reported on the state of the economy as well as developments in the foreign currency market. Fischer also reported that he was drafting a new Bank of Israel Law, together with Minister of Finance Ronnie Bar-On.
Fischer did not announce any concrete decisions, and the conference may be seen as a public continuation of the meeting he held with Prime Minister Ehud Olmert and other leading politicians and economists on Thursday. At that meeting, Fischer prevailed in his view that there is no need to interfere with the foreign currency market, and that lowering the interest rate will not lower the shekel against the dollar.
Sources at the Prime Minister's office have distanced themselves from a proposal by Histadrut chairman Ofer Eini and Manufacturers Association president Shraga Brosh to change the Bank of Israel Law in order to force the central bank's Governor to lower interest rates. When asked by "Globes" if they support drafting a special bill that would force the Bank of Israel to lower rates, sources at the Prime Minister's office answered "Heaven forbid".
In response to the special bill, Fischer commented that "We shouldn't play populist games with the Bank of Israel Law."
Published by Globes [online], Israel business news - www.globes-online.com - on February 10, 2008
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