Low haredi labor-force participation cannot be allowed to continue, Bank of
Israel Governor Stanley Fischer said Wednesday at the Herzliya
“I very much appreciate our religion and the religious people
here,” he said, but if the low participation rate among the ultra-Orthodox
continues, “it is going to be very difficult to supply our citizens with a
standard of living that keeps improving.”
Fischer noted that only 40
percent of haredim are employed and also expressed concern about the situation
in the Arab community, where, he said, one-quarter of women work. Efforts are
being made to improve the situation in both communities, he said, pointing out
that about 6,000 haredim currently study in colleges, while the amount of
businesses being established by Arabs is growing.
Fischer also addressed
the Bank of Israel’s January 23 decision to lower the benchmark interest rate
from 2.75 percent to 2.5% – the third time the central bank has lowered the rate
in five months, joining policy makers from Brazil to Indonesia in easing access
He said the country has “plenty of room” to lower interest
rates if necessary.
“We will adjust the rate according to the situation
in the economy,” he said. “If it turns out that we are dealing with a difficult
problem, we will use the monetary tool.”
In contrast to 2009, when the
bank said it would gradually raise the interest rate to normal levels, Fischer
said this time the bank would make no such statements and would wait to see how
events pan out in Europe.
Discussion “has improved” since a six-person
monetary committee headed by the central-bank governor was appointed to set
interest rates late last year, he said. Prior to the committee’s
appointment, Fischer alone set the interest rate, acting on advice from other
Bloomberg contributed to this report.