Israel’s biggest exporters are bracing for the end of central bank support that has helped them stay competitive during the pandemic, a move they say may weigh on a US$100 billion industry crucial to the nation’s economic rebound.
The Bank of Israel is close to exhausting a US$30 billion dollar-buying programme that has reined in gains in the shekel and made exports cheaper to foreign buyers while the nation battled Covid-19. With the economy on the mend, and governor Amir Yaron signalling on July 5 that the programme was a temporary salve, companies from Teva Pharmaceutical Industries to Israel Aerospace Industries are on edge.
“We’re living with uncertainty,” said Natanel Haiman, the head of economics at the Manufacturers’ Association of Israel, a Tel Aviv-based organisation that groups more than 1,850 companies accounting for more than 90 per cent of the country’s industrial base. “It’s a daily battle to keep the production lines moving”, partly because of the exchange rate.