Finance Ministry Director-General Yarom Ariav on Monday rebuffed pressure from exporters to continue cutting interest rates, instead calling on them to face up to the reality that Israel was part of the global market and that the Bank of Israel and the Treasury have no real ability to influence the shekel-dollar exchange rate. "No one at the Bank of Israel or the Finance Ministry can influence the shekel-dollar exchange rate," he said at a conference organized by the College of Management and Academic Studies in Rishon Lezion. "Cutting interest rates by 25 basis points or 50 basis points has a very limited impact on the exchange rate. Despite all the pressures from exporters, we are telling them this is the situation in the global markets and this is the price we have to pay if we want to be part of it," Rather, Ariav said the role of the government was to sustain long-term growth levels by focusing on sound economic policies to close the social gaps and on removing the obstacles that distance the country from global markets. Also speaking at the conference, Dr. Serhan Cevik, emerging markets analyst at Morgan Stanley, said the central bank was too focused on the exchange rate when making monetary decisions. "I don't understand why the local currency should depreciate when you have such improvements and structural shifts in the Israeli economy, a positive current account surplus and amazing human capital. Although there are pressures from exporters, who are unhappy, it is an adjustment this country has to go through," said Cevik. "In our view, the shekel is still undervalued." The analyst added that one of the burdens weighing on the the exchange rate in Israel was the phenomenon of dollar-linked price fixing. "It is completely irrational, you put shekels into your bank account but rent in dollars," he said. Discussing the global capital markets, Giles Keatings, head of global research at Credit Suisse, predicted that the substantial weakness of the dollar, in particular, against the euro was reaching its end. "The decline is unlikely to go much further and we will see a significant reversal ahead", said Keatings. At the same, Keatings was optimistic about the continuation of the rapid expansion of the global economy. "After five years of rapid global economic expansion, we are likely to see another five years creating new sources of raising capital in Israel and around the world," Keatings told the gathering. "The boom market in equities, which has been continuing for four years is likely to continue for a further four years as valuations are still cheap, while company earnings continue to be strong." Keatings warned, however, that there would be one or two corrections along the way. "As the boom market continues, we will see more nasty corrections," said Keatings. "We are likely to see a large stock market correction by the end of this year or more probably by the beginning of 2008, when Japan ends carry trades."