Israel Devalues Shekel Just Over 4% Against Dollar
Israel devalued its currency, the shekel, just over 4% against the dollar today in a bid to revive a stagnant economy badly hit by the Palestinian uprising.
Finance Minister Shimon Peres said the second devaluation in six months is intended to stimulate export-led growth without fueling inflation.
A Bank of Israel spokesman said the shekel’s value had been allowed to slide a total of 10.8% since the last formal devaluation Jan. 1.
The Central Bureau of Statistics said the economy showed no growth at all in the first four months of this year, while industrial output continued to decline.
Officials said that apart from disrupting a flow of cheap Arab labor to Israel, the uprising has drastically reduced Israeli exports of basic goods to the occupied areas, raised defense costs and created a climate of uncertainty harmful to investment.
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