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Though Bank of Israel governor Stanley Fischer has won plaudits the world wide for his abilities, Shuki Oren for one thinks some policy makeovers are in order. For starters, the bank should give its profits to the treasury, says the Finance Ministry accountant general.

"The State of Israel has not received any of the Bank of Israel's profits for many years," Oren said yesterday, speaking at his department's annual conference in Jerusalem.

Right now the Bank of Israel is sitting on foreign currency reserves of more than $50 billion. But even if the exchange rate of the dollar skyrockets, it won't give a shekel to the treasury even though that's what central banks in "other western countries" would do, Oren said.

During the last year and a half, the Bank of Israel soaked up roughly $30 billion on the forex market, at what is likely to prove to have been very low exchange rates. But when it sells the dollars for a profit, will the state see a sou of it? Not according to Oren, at the round-table discussion on foreign-currency policy in Israel.

The Bank of Israel's stated purpose in buying up foreign currency during the last 18 months has been to support the dollar against the shekel, in order to help exporters. But that isn't how to do it, Oren argued yesterday. The way to combat the strength of the shekel against the dollar is not intervention: it's "other steps," such as creating a tax policy that favors exporters.

Barry Topf, manager of the markets division at the Bank of Israel, confirmed that the Bank of Israel doesn't give the state profits from its currency transactions. Topf argued that the central bank's monetary policy is highly transparent. During the last two years, when the entire global economy was wracked by crisis, the central bank had to shape its policy accordingly, which led it to depart from its practices over the past 11 years and intervene in the forex market. The central bank officials hope soon to be able to abandon intervention entirely, or at least confine it to extreme circumstances, Topf added.

Topf added that he had not seen a single speculative attack on the shekel-dollar exchange rate in Israel. "Israel's exporters are the main element determining the exchange rate," he said.

While on the dollar, he predicted that its status as the main currency in national foreign currency reserves will weaken, but the process will take years. In parallel, the status of China's currency, the yuan, will strengthen, Topf forecast.

Ilan Raviv of UBank injected a cynical note, saying a very strong consensus had been created in Israel, that the dollar is weakening, and that the end of the process can't be seen. Usually, a consensus that strong proves wrong, Raviv said, an dapplauded the Bank of Israel's intervention. If anything, though, it should be less transparent, he said.