Kahlon Says BOI Foreign Currency Purchases Vital

The Bank of Israel in Yerushalayim. (Ester Inbar)
The Bank of Israel in Yerushalayim. (Ester Inbar)

Minister of Finance Moshe Kahlon has given his unreserved backing to the Bank of Israel’s foreign currency-purchasing policy, Globes reported.

Kahlon told senior officials of the Bank on Monday morning that its large buys of foreign currency was vital to keep the economy going, “a main instrument for supporting exports, industry and maintaining employment. There is a direct connection between the policy of purchasing foreign currency and the low-point in unemployment that we have in the economy. The measures taken by the Bank of Israel strengthen exports and I support them.”

Kahlon said that Israel’s exports rest on four companies — Iscar, Intel, Teva Pharmaceutical and Israel Chemicals — plus the defense companies. He downplayed a drop in exports at Teva as a “technical matter” and the Intel slowdown was only “temporary.”

Kahlon’s support for the BOI was seen as a response to National Economic Council head Prof. Avi Simhon’s call for the Bank to stop the foreign currency purchases once the reserves have crossed the $90 billion threshold. While Simhon conceded that such a halt would harm industry and exports and cost 20,000 jobs, he said that those workers would find employment in the services industry.

Histadrut chief Avi Nissenkorn denounced Simhon’s comment as “shocking” and called on Prime Minister Binyamin Netanyahu to disavow NEC stance. However, Netanyahu has thus far stayed out of the dispute.