All articles tagged with #bank of israel
Stanley Fischer, a prominent economist who served as vice chair of the U.S. Federal Reserve and head of the Bank of Israel, has died at age 81. He was influential in shaping modern economic policy, mentored future central bankers, and played a key role in Israel's economic stability during crises. His contributions were widely recognized and praised by world leaders.
Stanley Fischer, a prominent American-Israeli economist and former head of the Bank of Israel who also served as vice chair of the U.S. Federal Reserve, has died at age 81, leaving a significant legacy in global and Israeli economic policy.
The Bank of Israel has warned of economic repercussions if more ultra-Orthodox Jewish men do not join the military, citing the increased personnel needs during the recent conflict with Hamas. The exemption of ultra-Orthodox Jews from military service since 1948 has led to a disproportionate burden on other soldiers and the economy. Prime Minister Benjamin Netanyahu's government aims to end these exemptions, but faces opposition from ultra-Orthodox Jewish parties, leading to a rift in the coalition. The Bank of Israel also highlighted the economic impact of the fast-growing ultra-Orthodox sector and emphasized the need for fiscal discipline in the face of increased defense spending.
The ban on nearly all Palestinian workers entering Israel following a terror attack has caused a supply shock to the Israeli economy, particularly in the construction and agriculture sectors, with potential impacts on prices. The ban has also hurt the economy of the West Bank and led to pressure on lawmakers to allow some workers to return. The Finance Ministry warned of significant economic damage, and the central bank governor emphasized the need to monitor price developments and prevent financial instability in the face of potential expansion of the war.
The Bank of Israel has decided to keep interest rates on hold as it cuts its growth forecasts due to the ongoing conflict in Israel. The central bank had previously projected a growth rate of 6.3% for 2021, but has now revised it down to 5.1%. The decision to maintain interest rates at 0.1% was made in order to support the economy amidst the uncertainty caused by the conflict.
The Bank of Israel has announced its first-ever sale of foreign currency, up to $30 billion, in an effort to stabilize the shekel amid the ongoing war with Palestinian militants in Gaza. The shekel has already weakened by 10% this year due to political turmoil, and the announcement caused it to fall 2.8% against the dollar. The central bank aims to decrease market uncertainty and ensure regular market activity. It also plans to provide liquidity through swap mechanisms. Despite expectations of a weaker shekel in the medium term, economists do not anticipate sustained bouts of shekel weakness. Israeli stock and bond prices rebounded after a 7% slide, while government bond prices were mixed. Israel's forex reserves, amounting to over $200 billion, provide a strong position for the country.
The Bank of Israel plans to sell up to $30 billion in foreign exchange to protect the shekel from collapse during the ongoing Gaza war. The central bank aims to moderate volatility in the shekel exchange rate and ensure the proper functioning of the markets. Additionally, the bank will provide dollar liquidity through SWAP mechanisms of up to $15 billion. Despite the announcement, the shekel weakened over 2% to around 3.92 to the dollar as fighting continued near the Gaza border. The move comes as the shekel has already weakened nearly 10% this year, contributing to inflation and raising concerns of a constitutional crisis.
The Bank of Israel has announced plans to sell up to $30 billion in foreign reserves to support the Israeli shekel, which has weakened to its lowest level in seven years following the recent deadly incursion by Hamas militants. The central bank aims to moderate volatility in the shekel exchange rate and ensure the proper functioning of markets. In addition to the reserve sales, the bank will provide liquidity through SWAP mechanisms. The Israeli economy is expected to recover quickly unless there is a physical attack by Iran, according to Zvi Eckstein, former deputy governor at the Bank of Israel.
Bank of Israel Governor Amir Yaron stated that currency intervention to support the weaker shekel will only be considered if there are market failures. The central bank recently kept benchmark interest rates steady at 4.75% but hinted at potential rate hikes to combat inflation. The shekel has depreciated following new legislation on the Supreme Court, sparking protests. Yaron believes that market forces should dictate the shekel's value, but if there are significant movements or market failures, the central bank has the tools to intervene. The bank expects inflation to return to target levels in the first quarter of next year but remains vigilant and ready to raise rates if necessary.