The Bottom Line / Playing With Fire

The last thing we need now is an economic shock. The Qassams in Sderot, the rocks on Road 77 and the threats of suicide attacks in the center of the country are more than enough. This is also a particularly restless period for the world economy. There are fears of a recession in the U.S., and of the effects it would have on the entire world - including here. International investors are sensitive and very nervous these days. That is why forcing the Bank of Israel to lower interest rates now would be an incredibly irresponsible act. That would really be playing with fire.

What does Shraga Brosh want? For Stanley Fischer to quit? In his place, some political crony would get the job and do what the industrialists want - while the entire economy is hit with high inflation. Then investment, employment and growth will all be hurt badly, and the trust that we have earned over the past few years among international investors will be completely ruined.

This is not the first time the industrialists have tried to force the central bank to lower interest rates, both through legislation and political pressure. It is true that exporters have a real problem. The dollar is plummeting, and the euro too of late. But the problem is not speculators taking advantage of the interest rate gap - the gap is too small for that. Israeli businessmen are simply selling off their foreign currency because they want to reduce their exposure.