Kahlon: Strong Shekel Not a Crisis

Israeli Finance Minister Moshe Kahlon. (Hadas Parush/Flash90)

Finance Minister Moshe Kahlon sought to calm exporters at a conference of senior government officials and private sector leaders on Monday, after the shekel maintained strength against the dollar and euro despite Bank of Israel interventions.

Kahlon called a special meeting that was attended by Minister of the Economy and Industry Eli Cohen, Deputy Minister of Finance Yitzhak Cohen, Manufacturers Association of Israel president Shraga Brosh, Ministry of Finance Director General Shai Babad, Commissioner of Capital Market, Insurance and Savings Dorit Salinger, Budgets Commissioner Amir Levy, Ministry of Finance chief economist Yoel Naveh, Accountant General Rony Hizkiyahu, Israel Tax Authority director Moshe Asher, and Israel Export Institute chairman Ramzi Gabbay, according to Globes.

“A strong shekel is not a crisis,” Kahlon said, “It’s a result of a strong economy. The Israeli economy has had one of the best years in its history, and the strengthening of the shekel is a direct result of the strong economic figures. At the same time, we cannot ignore the damage to exports, and alongside the Bank of Israel’s short-term monetary actions, we must put our shoulders to the wheel to outline policies for strengthening industry and boosting productivity in the long term. The government of Israel will not abandon the exporters.”

Brosh said he welcomed Kahlon’s efforts, while noting that “weaker foreign currencies threaten all sectors of industry, as there is no sector capable of absorbing appreciation of 10 percent against the euro or 15 percent against the pound sterling or even 5 percent against the U.S. dollar.

“The solution is raising productivity, and that can come only if we invest immediate resources in education and technological training, and in reducing regulation. The high costs of production in Israel must be lowered, starting with municipal costs. I also call on the Bank of Israel to continue the monetary actions that are rescuing exports at this time,” Brosh said.

Kahlon directed the Committee for Strengthening Industry to meet on Thursday, specifically to address the question of how to distribute 100 million shekels earmarked for technological education, and an accelerated depreciation track for encouraging investment in industry.