Bethel Finances: Accountant General: "A weak dollar has positive aspects"

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Bethel Finance news:

"A weak dollar has positive aspects. It moderates the rise in fuel prices, which serves the Israeli economy. What would the price of gasoline be if the shekel-dollar exchange rate were to reach NIS 4/$?" Accountant General Shuki Oren told "Globes".

"Obviously, exporters are hurting. Nonetheless, I do not think that this should be the only factor for us. It would be wrong for our perspective to be only through the prism of Israeli exports."

Behind the scenes, Oren does not support the continued dollar purchases by the Bank of Israel. "The policy of foreign currency purchases belongs to the Bank of Israel. The Bank of Israel itself said that this policy could not continue forever. There's no doubt that this policy helped contributed to the economy's strength and soundness, but it's important to emphasize that we're no longer in a crisis, and this must be included in our calculations," he said.

Oren is also dubious about the effectiveness of abolishing the exemption on foreign investors' profits on makam (short-term Treasury bills). "There's no reason for the government to encourage foreign investors to make short-term financial investments," he says. "Therefore, cancelling this exemption is the right step, but will it dramatically affect the exchange rates? I doubt it."

Oren adds that the Ministry of Finance intends to continue hedging activities, but warns that his calculations are not those of the Bank of Israel. "Our hedging policy is continuing as usual. Part of the reason that we didn’t hedge last month was because of the Passover holiday. But we're not in the market in response to the exchange rate. In other words, the exchange rate is one of my factors, but we don’t hedge in order to affect the exchange rate, but to have an efficient debt management policy."

One factor behind the shekel's appreciation against the dollar is the weakness of dollar in the world. But this factor is not enough to explain the current low shekel-dollar exchange rate, because the dollar has not weakened against leading currencies. Furthermore, the shekel is also strengthening against the euro. Finally, the upheavals in the Middle East, including Egypt and Syria, ought to have worked against the shekel - but didn’t.