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Fischer: We will not intervene in dollar trading again without announcing it first By TheMarker Staff Tags: stanley fischer  Bank of Israel Governor Stanley Fischer told Bloomberg yesterday that the central bank would not intervene in the future in foreign currency markets without announcing it first. In a television interview from his Jerusalem office with the business news agency, Fischer defended the intervention, saying that he was pleased with the results as of now. Turning to the crisis in the U.S., Fischer said that Federal Reserve Chairman Ben Bernanke has the skills to guide the U.S. economy through a credit squeeze, now in its eighth month. Advertisement "You can inject liquidity in the economy and it happens that Ben Bernanke is an expert on this issue," said Fischer, who advised the Fed chief on his doctoral thesis at the Massachusetts Institute of Technology in the 1970s. "The Fed will get on top of this, I don't doubt." As to the Israeli economy, Fischer said it would slow down to a growth rate of only 3.5-3.6% percent in 2008, the bottom end of the central bank's forecasts - and the lowest growth rate since 2003. Fischer said that the Bank of Israel intervened in the foreign currency markets because the market was acting inefficiently in a technical way, according to a number of the central bank's criteria. Asked whether he would have still intervened if the shekel had been trading in the middle of the range that people thought was good for the Israeli economy, Fischer said he did not know. As to inflation, Fischer said that it is under control. As long as the central bank feels that the inflation problem is under control and within the target range, it can take steps to support growth, he said. Fischer gained insight into rescuing economies as the International Monetary Fund's number two official during the Asian financial crisis and Russian debt default of the 1990s. In that period, the IMF made a quarter of a trillion dollars in emergency loans to countries including Argentina and Korea. Still, the implication of the U.S. slump "for the global economy far exceeds the things I've seen previously," he said. "I haven't seen anything on this scale for the global economy at least since I've been active." Fischer is rare among the current crop of central bankers in that he has experience of academia, policy making and banking. As well as working at the IMF and teaching at MIT, he served as chief economist at the World Bank and, prior to moving to Israel in 2005, was employed by Citigroup Inc. as a vice chairman. He declined to forecast when the credit squeeze will pass, only that it would. "I've lived through crises, they have a rhythm,'' he said. The U.S. economy is "not going to collapse, it will come back." Bookmark to del.icio.us   Free interpretation Yesha rabbinical council ruled it is forbidden for Jews to employ Arabs. Little Africa Tel Aviv is setting up a tent city to improve the living conditions of African refugees.

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