Fischer sees first quarter growth above 4.5%

By GLOBES’ CORRESPONDENT
May 1, 2011 23:04

Bank of Israel Governor Prof. Stanley Fischer has told the 'Wall Street Journal' that the Israeli economy “is doing very well."

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The Jerusalem Post

Stanley Fischer 311. (photo credit: Bloomberg)

Bank of Israel Governor Prof. Stanley Fischer has told the Wall Street Journal that the Israeli economy “is doing very well,” and that he would not be surprised if “we grew faster than” the current first quarter growth forecast, which the bank recently raised from 3.8 percent to 4.5%.

A large part of Fischer’s interview was devoted to foreign exchange rates and he told the newspaper that “the bank hopes the need for intervention in foreign exchange markets will be minimal,” adding, “It [the central bank] is prepared to intervene if the shekel’s value isn’t appropriate.”

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Fischer also acknowledged the bank’s willingness to accept a stronger shekel, pointing to interest rate hikes earlier this year and to the currency’s recent rise.

However, he declined to comment on the US Federal Reserve’s quantitative easing program, and said, “I’m sure when interest rate relationships return to normal, which is not going to happen overnight, then because of capital flows, exchange rates will adjust.”

Although Fischer was upbeat on the Israeli economy, he admitted that regional uncertainties cast a cloud over the future.

“It’s a promising outlook, but we know we live in an uncertain world so you have to stay on your guard all the time,” he said. “There is a lot more uncertainty than there used to be.We’ve got to be prepared for a greater variety of scenarios.”


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