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November 24, 1967 - Image 3

Resource type:
Text
Publication:
The Detroit Jewish News, 1967-11-24

Disclaimer: Computer generated plain text may have errors. Read more about this.

Knesset Members Fear Prices Will Rise as Pound Is Devalued

(Direct JTA Teletype Wire
to The Jewish News)

JERUSALEM — The cabinet de-
cision to devaluate the Israel pound
came under heavy fire in a Knesset
debate here Monday night by mem-
bers who voiced fear of a serious
rise in prices despite Finance Min-
ister Pinhas Sapir's assurances
Monday that price rises, if any,
would be negligible.
Leading the attack were mem-
bers of coalition parties including
Zvi Tsur of the alignment (Mapai
and Ahdut Avoda): Dr. I. Ben
Meir, of the National Religious
Party; Victor Shem-Tov of Mapam;
Dr. Johanan Bader of Gahal (Her-
ut and Liberal Party fusion) and
A. Degani of Rafi. The immediate
object of concern was the price of
such basic food commodities as
milk and eggs which depends on
yearly imports of fodder from the
United States, amounting to
$40,000,000.
The critics said that the govern-
ment would not be able to prevent
a price rise and that wage earners
would suffer. The cabinet was ex-
pected to rule this week on the
price of milk and eggs which is ex-
perted to go up 5 per cent unless
subsidized.

Meanwhile, it was learned that
Jordan has decided not to deval-
ue the dinar, which is linked to
the pound sterling and which is
legal tender in the occupied
West 'Bank area. The Israel
pound now stands at 9.80 to the
dinar instead of the previous
8.40, which is also the ratio of
Israel pound to pound sterling.

The Israeli government an-
nounced the 14.3 per cent devalu-
ation of the Israeli pound Sunday
after similar action by the British
government. The Israeli pound
previously had been valued at 3 to
the dollar. The new rate will be
3.5 to the dollar. Messages ex-
changed between Leslie O'Brian,
governor of the Bank of England,
and David Horowitz, governor of
the Bank of Israel, pledged mutual
support and assistance in connec-
tion with the devaluation of the
two currencies.
(In London, the Financial
Times said Monday that the de-
vadluation in Jerusalem would
have a beneficial effect on invest-
ments from abroad. The devalua-
tion, the paper said, would make
transfer of funds to Israel more at-
tractive and would end speculation
that had been current that the
Israeli government would devalue
its currency independently of
other international developments.)

Sapir said that the prices of
goods imported from hard cur-
rency countries would probably
rise slightly. He added that Is-
raeli customs duties would re-
main at present levels which, in
effect, meant lowering of those
rates. Goods from the pound
sterling area will thus have an
advantage over similar products
from the United States or Cen-
tral Europe, he explained.

"Price rises abroad as compared
to Israel will, at the worst, bring
about small increases in the prices
of these products in Israel," he
told the radio audience. "On the
other hand, the lowering of cus-
toms tarriffs may cause lower
prices for certain products im-
ported from the sterling bloc."
He said that the government ef-
fort to keep domestic prices stable
would include fuel and that there-
fore transportation and electricity
charges would not increase. This
was being done, he declared. so
that the basic standard of living
"will not be hurt." He said Israel
had to act to prevent the danger
of shrinkage of exports stemming

Ancient Stone Coffins
Found in Hebron Cave

(Direct JTA Teletype Wire
to The Jewish News)

JERUSALEM—Four sarcophagi
(stone coffins) dating back from
the era of the Second Temple
were found in a cave in the He-
bren hills and have been removed
for safe keeping by the depart-
ment of antiquities of the Israel

government.

from the competition of sterling
bloc countries whose export prices
are now lower because of devalu-
ation. He expressed confidence
that Israel would pass through the
new trial and continue to strength-
en its economy.

Sapir later told the Knesset that
incentives now paid to exporters
would be cut less than the devalu-
ation percentage so that the ex-
porters would, in effect, be able to
compete on better terms than be-
fore in overseas markets. Export
industries such as diamonds and
citrus, which did not receive the
incentive allowances, should also
be in a better competitive position
with the new rate of exchange, he
said.

No effects of the overnight
shifts in currency relations were
observable at Haifa port where
ships departed with their sched-
uled passengers and the Lod
Airport was as busy as ever.
Israel took the news of the de-
valuation calmly. It was gen-
erally expected that the price of
imported goods would rise less
than the new exchange rate
might warrant since customs du-
ties have been left unchanged,
or, in some cases, reduced. The
controller of foreign exchange in
the finance ministry estimated
that average price increases
would be no higher than 1 to 2
per cent.

Leading figures in Israeli com-
merce and industry met with the
minister of commerce and indus-
try, Zeev Sharef, and agreed to
use their influence to hold price
levels on stocks still in inventory.
Sharef warned that the government
would not hesitate to use all legal
means at its disposal to resist un-
warranted price increases.

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THE DETROIT JEWISH NEWS

The Tel Aviv Stock Exchange
remained closed Manday and re-
opened normal operations Tues-
day after the situation was cleared
up, officials said. Stock Exchange
sources said that they anticipated
increased investments by foreign
investors because of the better ex-
change rate which they said should
put "new blood" into the securities
markets here. Banks resumed nor-
mal operations Monday for all cur-
rencies for which exchange rates
had been fixed. Activity in other
currencies was being undertaken
on the responsibility of the bank.

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