Histadrut labor federation chairman Ofer Eini warned yesterday that he would shut down the Israeli economy for an entire day if the state does not intervene to stop the dollar's fall against the shekel. According to Eini, such a strike might rouse the cabinet from its inactivity in this regard. He spoke at a meeting of industrialists with Minister of Trade and Industry Eli Yishai. Exporters present there reported to Yishai that they have already started to fire workers because of losses due to the drop in the dollar exchange rate.
Shraga Brosh, president of the Manufacturers Association, called on the governor of the Bank of Israel, Stanley Fischer, to lower interest rates by a full percent in stages, to prevent even more speculative capital from coming to Israel and further lowering the dollar. Yishai said he would support taxing speculative capital movements in the cabinet.
In addition, businesses - particularly those that export or are otherwise dependent on the dollar - are expected to announce a wave of profit warnings. The CFO Forum conducted a survey of 107 local companies, which showed that 49% felt the dollar crisis will seriously hurt companies and the economy in general; 41% of the CFOs questioned said their own companies would suffer seriously.
As for efforts to prevent exchange-rate fluctuations, 64% of the respondents said they had taken such steps, although they are only helpful in the short and medium run; 27% said they did not have the tools to deal with the crisis, and 9% are considering moving over to the shekel. Finally, the majority of the CFOs polled, 58%, feel Fischer is doing the right thing by concentrating on inflation - but support for him is dropping along with the dollar.
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